Colombo stock market gains over positives of DDO

The Colombo stock market managed to rebound on improved investor sentiment on banks following the conclusion of the Domestic Debt Optimisation.

Both indices gained by over 0.8% and the turnover was Rs. 1.78 billion involving 62.3 million shares.

Asia Securities said the indices commenced the session on a positive note with renewed buying interest observed in the banking stocks DFCC (+2.3%), HNBX (+2.3%), HNBN (+1.4%), COMBN (+1.2%), SEYBN (+2.0%), NTBN (+0.9%) and SAMP (+0.9%) as investors returned at lower prices following consecutive sessions of profit-booking. 

In addition, front-line stocks MELS (+5.7%), SUN (+3.3%), CFIN (+2.6%), LIOC (+1.0%), HAYL (+1.3%), DIST (+1.5%) and CICX (+0.5%) recorded price gains during the session. On the other hand, JKH (-0.3%), EXPO (-0.7%), MGT (-1.3%) and SCAP (-1.7%) suffered some price losses. 

MELS (+22 points) came in as the biggest index mover, followed by CINS (+11 points), COMBN (+8 points) and HNBN (+7 points). The breadth of the market was positive with 114 price gainers and 74 decliners. 

Off-board transactions boosted turnover (32% of turnover) led by MELS (Rs. 258 million), RIL (Rs. 130 million), and HNBN (Rs. 110 million). JKH also saw Rs. 163 million in turnover.

Foreigners recorded a net outflow of Rs. 97.1 million. Net foreign buying topped in TKYO.X at Rs. 9.5 million and selling topped in JKH at Rs. 94 million.

First Capital said the broad market rebounded positively with an intraday gain of 91 points as the uncertainties hovered around the DDO came to an end. The CBSL signalled the completion of DDO after accepting 37% of all eligible treasury bonds and 84% of bonds held by superannuation funds to be exchanged for new bonds as part of a DDR. Hence, market opened on an uptrend, remained on the rise and closed for the day at 11,439. Moreover, a notable buying spree on MELS was witnessed among retailers and high net worth investors through off board transactions given the attractive valuations on the share. 

Active collection on banking counters was witnessed, as the weighted average yields trimmed down at the weekly T-Bill auction after 3 weeks. In the midst of active participation, turnover significantly improved by 95% to Rs. 1.8 billion compared to the previous session and was largely backed by the off-board transactions of MELS, HNB and RIL. The Food, Beverage and Tobacco, Capital Goods and Banking sectors jointly contributed 70% to the overall turnover.