Colombo stock market struggles

The Colombo stock market yesterday saw lacklustre investor activity with low turnover and indices declining.

Turnover was only Rs. 786 million involving 41.7 million shares. The S&P SL20 Index was down by 0.9% and the ASPI by 0.8%.

Asia Securities said following a positive start to the session, the indices slipped into negative territory and ended in red for a third consecutive session on Thursday while retail and HNI activity was recorded at lower levels with turnover coming in at Rs. 786 million (previous session Rs. 1,121 million) supported by BIL (Rs. 151 million), EXPO (Rs. 92 million), and LWL (Rs. 89 million). 

Earlier, the ASPI crossed the 7,800 mark briefly with a gap-up of 37 points and touched an intra-day high of 7,809 in the first few minutes of trading. Thereupon, the index trended downwards, weighed by price losses in BIL (-4.4%), LOLC (-3.9%), LOFC (-2.7%), EXPO (-0.7%), LIOC (-4.5%), VONE (-3.2%), and HAYL (-1.4%). The breadth of the market remained negative with 64 price gainers and 104 decliners. Asia also said foreigners recorded a net outflow of Rs. 15.5 million while their participation declined to 5.2% of turnover (previous day 14.1%). Net foreign buying topped in JKH at Rs. 6.4 million while net foreign selling topped in DIAL at Rs. 12.6 million. First Capital said the Bourse continued its downward trajectory for the third consecutive day in response to the biggest Fed rate hike since 1994 of 75 bps, and possibility of another hike next month to contain the rampant US inflation. 

The Index witnessed a slight upscale in the beginning but failed to hold on to the position as retailers exited selected stocks due to margin calls. Meanwhile institutional investors continue to remain on the side-line. With that, the index closed lower to nearly one and a half-week low at 7,705, losing 67 points. 

With retailers reducing their positions in the market, turnover significantly declined (29.8%) compared to previous day and was recorded at Rs. 0.8 million with a joint contribution of 53% from Capital Goods and Food, Beverage and Tobacco sectors. 

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings. Mixed interest was observed in Expolanka Holdings, Lanka Walltiles and Lanka IOC whilst retail interest was noted in Browns Investments, LOLC Finance and Blue Diamonds Jewellery Worldwide. 

Capital Goods sector was the top contributor to the market turnover (due to Lanka Walltiles and John Keells Holdings) whilst the sector index lost 0.80%. The share price of Lanka Walltiles moved up by Rs. 1.10 (1.84%) to close at Rs. 60.80. The share price of John Keells Holdings declined by 25 cents (0.20%) to close at Rs. 124. Food, Beverage and Tobacco sector was the second-highest contributor to the market turnover (due to Browns Investments) whilst the sector index decreased by 1.18%. The share price of Browns Investments decreased by 40 cents (4.44%) to close at Rs. 8.60.

Expolanka Holdings and Lanka IOC were also included among the top turnover contributors. The share price of Expolanka Holdings lost Rs. 1.25 (0.71%) to close at Rs. 174. The share price of Lanka IOC recorded a loss of Rs. 3.10 (4.45%) to close at Rs. 66.50.