ASPI plunges in risky investor behaviour; turnover soars to over Rs. 12 b

• Fall of illiquid stocks of LOLC Group after mid-day spike renews the need for investors to focus on fundamentally sound companies

The All Share Price Index plunged by 260 points or 2.4% and the S&PSL20 was down by 46 points or 1.26%. Turnover however, was a recent high of Rs. 12.2 billion involving a massive 673 million shares, mostly due to heavy day-trading or recycling of trades.

Latest number one Commercial Leasing contributed 104 points to ASPI's dip, followed by NIFL, Expo, LOFC and Vallibel One.

Latest attraction LOFC saw its share price decline by nearly 8% or Rs. 1.60 to close at Rs. 17.10, but mid-day, it hit a record high of Rs. 31.30, which was Rs. 14.20 higher than the closing. LOFC saw 160.3 million of its shares change hands via 20,777 trades for Rs. 3.8 billion.

Asia Securities said the ASPI, witnessing its biggest single-day fall in two months, plunged 260 points or 2.4% in a highly volatile session on Tuesday (9) mainly on the back of sharp price declines recorded in momentum-driven stocks such as CLC (-10.1%), NIFL (-16.1%) and LOFC (-7.7%), while the S&P SL20 index also closed in red due to price losses in EXPO, JKH, and VONE.

“Earlier, the ASPI opened trading crossing the 10,800-mark for the first time and recorded an all-time high of 10,875 (+254 points) within the first 15 minutes of trading. However, the index quickly lost ground, sliding 278 points and reached a low of 10,597 before witnessing another subsequent pick-up of 127 points to reach 10,724 in mid-afternoon trade. 

“The index slumped again in the second half of the session and dipped into negative territory losing around 362 points during the closing hours of the session to end 260 points or 2.4% lower at 10,362,” Asia said.

It said leading the decline in the ASPI, CLC contributed 105 negative points to the index, followed by NIFL (-50 points), EXPO (-32 points), and LOFC (-19 points). The drop in the index came amidst investors’ concerns over the recent surge in prices of certain momentum-driven stocks.

Asia said turnover was boosted by activity in LOFC, BIL, and RIL, which collectively accounted for 65% of total turnover. Market breadth remained negative as 66 stocks ended higher while 150 settled with losses at market close.

It said foreigners recorded a net inflow of Rs. 48 million while their participation remained flat at 0.8% of turnover (previous day 1.1%). Net foreign buying topped in BIL at Rs. 18.5 million and net selling topped in LOFC at Rs. 9 million.

First Capital said the bourse remained in the red zone while closing the day with a nearly two-month-high intraday loss, despite recording a two-month high turnover.

“The index kicked off on a positive note, hitting an intraday high of 10,904 within the first 20 minutes of the session. Following a price drop in major contributors such as CLC, NIFL, EXPO and LOFC, investors panicked and urged to collect profits in selected counters. Eventually, the market took a reversal trend and traded in the negative zone and ended up closing at 10,362,” First Capital added.

It said turnover was led by the Diversified Financials sector, followed by the Food, Beverage and Tobacco sector, accounting for a joint contribution of 64%.

NDB Securities said the ASPI closed in red as a result of price losses in counters such as Commercial Leasing & Finance, LOLC Development Finance and Expolanka Holdings.

It said high net worth and institutional investor participation was noted in Access Engineering, Vallibel One and John Keells Holdings. Mixed interest was observed in R I L Property, Expolanka Holdings and LOLC Holdings, whilst retail interest was noted in Browns Investments, Lanka Orix Finance and Panasian Power.

The Diversified Financials sector was the top contributor to the market turnover (due to Lanka Orix Finance and LOLC Holdings), whilst the sector index lost 6.17%. The share price of LOLC Holdings appreciated by Rs. 1.25 (0.19%) to close at Rs. 652.25.

The Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments), whilst the sector index decreased by 0.55%.

The share price of Browns Investments gained 10 cents (0.88%) to close at Rs. 11.40.

R I L Property and Expolanka Holdings were also included amongst the top turnover contributors. The share price of R I L Property moved up by Rs. 2.60 (27.66%) to close at Rs. 12. The share price of Expolanka Holdings recorded a loss of Rs. 7.25 (3.50%) to close at Rs. 199.75.

Separately, Lion Brewery and Lotus Hydro Power announced their interim dividends of Rs. 3.68 and Rs. 1 per share respectively.