Bourse bearish ahead of President’s mini-Budget

The Colombo stock market remained bearish yesterday ahead of today’s mini-Budget presentation by President and Finance Minister Ranil Wickremesinghe.

The active S&P SL20 dipped by over 1% and the benchmark ASPI declined by 0.7% amidst low investor activity. Turnover was Rs. 1.2 billion involving 51 million shares.

The Colombo Stock Exchange (CSE) has suffered two consecutive week of losses.

Asia Securities said following a 64-point gap-up at 8,857, the ASPI slipped into red territory due to price declines in RICH (-6.1%), EXPO (-1.3%), LOFC (-5.3%), LOLC (-1.1%), and LIOC (-1.8%). The index eventually closed at 8,732 with a loss of 61 points (-0.7%) and the S&P SL20 index ended 33 points (-1.2%) lower at 2,831. RICH ended as the biggest laggard on the index, contributing 11 negative points followed by MELS (-7 points), EXPO (-5 points), and LOLC (-4 points). On the flipside, SPEN supported the index to a certain extent, contributing 12 points on the back of a 5.7% gain. 

Turnover declined to its lowest level in recent weeks as investors maintained a cautious approach ahead of the budget reading. EXPO generated the highest turnover during the session (Rs. 245 million), followed by LIOC (Rs. 153 million), and LDEV (Rs. 40 million). The breadth of the market ended negative with 86 stocks recording price gains and 117 settling with losses.

Asia also said foreigners recorded a net inflow of Rs. 59.2 million while their participation declined to 6.9% of turnover (previous day 12.0%). Net foreign buying topped in EXPO at Rs. 102.2 million and selling topped in CTC at Rs. 17.4 million. 

First Capital said the bourse ended negatively for the fifth day as investors took a sidelined approach ahead of the interim budget scheduled tomorrow with speculations on higher taxes expecting to affect corporates across the board. 

Consequently, amidst thin volumes and limited retail participation turnover plummeted to a one-month low (64% less than the monthly average turnover). Although the index opened on an upbeat note, selling took charge shortly resulting in the index to move on a downward trajectory and closed lower for the day at 8,732 losing 61 points. The Food, Beverage and Tobacco sector along with the Transportation sector dominated the overall turnover with a joint contribution of 46%.

NDB Securities said high net worth and institutional investor participation was noted in Ceylon Tobacco Company and John Keells Holdings. Mixed interest was observed in Expolanka Holdings, Lanka IOC and Lankem Developments whilst retail interest was noted in LOLC Finance, Asia Siyaka Commodities and Browns Investments. 

Food, Beverage and Tobacco sector was the top contributor to the market turnover (due to Lankem Developments and Bogawantalawa Tea Estates) whilst the sector index lost 0.59%. The share price of Lankem Developments moved up by 50 cents (1.97%) to close at Rs. 25.90. The share price of Bogawantalawa Tea Estates recorded a gain of Rs. 1.10 (1.72%) to close at Rs. 65.20.

Transportation sector was the second highest contributor to the market turnover (due to Expolanka Holdings) whilst the sector index decreased by 1.27%. The share price of Expolanka Holdings decreased by Rs. 2.75 (1.27%) to close at Rs. 214.

Lanka IOC and Aitken Spence were also included amongst the top turnover contributors. The share price of Lanka IOC lost Rs. 3 (1.79%) to close at Rs. 164.75. The share price of Aitken Spence appreciated by Rs. 6.75 (5.72%) to close at Rs. 124.75.