Stock market remains negative as macro concerns keep investors away

The Colombo stock market remained negative for the second consecutive day with indices down by over 2% amidst thin trading as investor concerns over macro issues impacted sentiment.

The All Share Price Index was down by 2.14% or 244 points and SandPSL20 Index dipped by 2.5%. Turnover was only Rs. 2 billion involving just 73 million shares.

Asia Securities said indices ended sharply lower due to broad-based retail and HNI selling pressure as investors took to the sidelines weighing on the current macro-level concerns, and adopted a cautious approach ahead of the monetary policy review meeting.

“Initially, the ASPI touched an intra-day high of 11,432 (+26 points) in the first hour of trading, however trended downwards thereupon and ended below the 11,200 level largely due to sharp price declines in EXPO (-5.8%), LOLC (-3.5%), BIL (-4.1%), RCL (-4.2%) and CLC (-3.8%). Overall, 34 counters ended higher while 173 closed lower,” Asia added.

It said overall activity momentum in the market remained moderate with trading volume for the day coming in relatively lower at 73 million (previous session-133 million) Turnover was its lowest level in the last four months, led by EXPO (Rs. 390 million), BIL (Rs. 229 million) and LIOC (Rs. 188 million).

Asia also said foreigners recorded a net inflow of Rs. 54.7 million boosted by net buying in TJL (Rs. 31 million) and JKH (Rs. 13 million).

First Capital said the Bourse closed lower and ended in the red zone for the second consecutive day while recording a near 1-week low turnover.

“The Index displayed a continuous fall after a short upswing at the beginning of the session ahead of the looming rate hikes by CBSL at the policy review meeting to be held tomorrow. As investors panicked over unceasing macroeconomic uncertainties, the market closed lower at 11,163, losing 244 points. Retail favourite counters such as EXPO and LOLC contributed largely to the ASPI dip,” First Capital said adding turnover was led by Food, Beverage and Tobacco, Diversified Financials and Transportation sectors accounting for a joint contribution of 57%.

NDB Securities said high net worth and institutional investor participation was noted in Browns Investments, Teejay Lanka and LOLC Holdings. Mixed interest was observed in Expolanka Holdings, Lanka IOC and Commercial Leasing and Finance, whilst retail interest was noted in Softlogic Capital, SMB Leasing and LOLC Finance.

Food, Beverage and Tobacco sector was the top contributor to the market turnover (due to Browns Investments), whilst the sector index dropped by 1.95%. The share price of Browns Investments lost 50 cents (4.13%) to close at Rs 11.60. Diversified Financials sector was the second highest contributor to the market turnover (due to Commercial Leasing and Finance and LOLC Finance), whilst the sector index decreased by 2.96%. The share price of Commercial Leasing and Finance recorded a loss of Rs 1.80 (3.83%) to close at Rs 45.20. The share price of LOLC Finance declined by one Rupee (4.35%) to close at Rs 22.

Expolanka Holdings and Lanka IOC were also included amongst the top turnover contributors. The share price of Expolanka Holdings decreased by Rs 16.75 (5.83%) to close at Rs 270.50. The share price of Lanka IOC moved down by Rs 4.80 (7.38%) to close at Rs 60.20.

Separately Royal Ceramics announced an interim dividend of Rs 1.50 per share.