Profit-taking triggers sharp dip at CSE; foreigners step up buying

The Colombo stock market declined for the second consecutive session yesterday with faltering activity levels.

The active S&P SL20 Index was down by 3% and the benchmark ASPI dipped by 2%. Turnover was Rs. 3.7 billion involving 129 million shares.

Asia Securities said indices moved downwards as investors extended profit-taking capitalising on the recent run of sharp gains. Particularly, front-line stocks EXPO (-4.0%), LOLC (-6.8%), LOFC (-4.8%), BIL (-6.9%), and HAYL (-3.4%) witnessed heavy retail and HNI profit-booking and weighed on both indices during the session. 

Turnover dipped due to a moderate slowdown in overall buying in the market. However, LIOC stayed on its upward trajectory, recording a gain of 4.1% on the back of steady local investors’ buying while JKH continued to witness significant foreign interest during the session. The breadth of the market closed negative with 72 stocks recording price gains and 135 settling with losses.

Asia also said foreigners recorded a net inflow of Rs. 77.1 million while their participation was at 2.2% of turnover (previous day 2.3%). Net foreign buying topped in JKH at Rs. 65.3 million and selling topped in VPEL at Rs. 4.5 million.

First Capital said the Bourse witnessed selling for the second consecutive day as retailers cut their margin positions pushing down the index below 9,000 levels, losing 179 points. Moreover, the end of a healthy quarterly reporting season together with the exceptional performance of the market during the past four weeks also enabled retailers to take out profits on fears that the market momentum is broken.  

As the energy ministry confirmed that there will be no price revision for fuel for the month of August, helped retailers to actively trade LIOC which contributed positively to the ASPI.

Turnover dropped below one-and-a-half week low although remaining above 44% of monthly average. Energy sector continued to dominate and contributed 29% to the market, while the Food, Beverage and Tobacco, and Capital Goods sectors jointly contributed 28%.

NDB Securities said high net worth and institutional investor participation was noted in Citizens Development Business Finance, John Keells Holdings and CIC Holdings. Mixed interest was observed in Lanka IOC, Expolanka Holdings and LOLC Holdings whilst retail interest was noted in Browns Investments, Agstar and SMB Leasing.

Energy sector was the top contributor to the market turnover (due to Lanka IOC) whilst the sector index gained 3.72%. The share price of Lanka IOC increased by Rs. 7.25 (4.06%) to close at Rs. 186.

Food, Beverage & Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments) whilst the sector index decreased by 1.76%. The share price of Browns Investments moved down by 60 cents to Rs. 8.10.

Expolanka Holdings, Citizens Development Business Finance and Agstar were also included amongst the top turnover contributors. The share price of Expolanka Holdings lost Rs. 8.75 (3.98%) to close at Rs. 211. The share price of Citizens Development Business Finance closed flat at Rs. 185. The share price of Agstar appreciated by Rs. 1.20 (10.62%) to close at 

Rs. 12.50.