Amidst DDR dilemma stock market sees spirited rebound

The Colombo stock market yesterday succeeded to close on the up to a three-month high after early morning slump thanks to spirited investor sentiment.

The active S&P SL20 gained by 1.6% and the benchmark ASPI by 1% after having dipped by over points in early trade. Turnover was Rs. 2.2 billion involving 90.4 million shares.

Asia Securities said the market commenced the week on a buoyant note as investors viewed the Domestic Debt Restructuring (DDR) announcement as a major positive development. The ASPI witnessed an initial dip, reaching an intra-day low of 9,195 (-144 points) as selling pressure emerged during early trading, with investors adopting a cautious approach while awaiting clear signals regarding the DDR. Nevertheless, the index gained momentum and trended upwards as buying interest returned in front-line stocks leading to a broad-based recovery. Eventually, the ASPI closed out at 9,434 (+239 points from its intra-day low). Notable price gains were recorded by SAMP (+2.5%), HNBN (+1.1%), JKH (+2.9%), SCAP (+4.0%), COMBN (+3.3%), HAYL (+3.0%), AAIC (+2.7%), RCL (+3.3%), TKYON (+2.3%), and TKYOX (+2.4%). SLTL (-1.4%), LOFC (-3.6%), EXPO (-1.5%), and WATA (-3.7%) closed with losses. The breadth of the market was positive with 95 price gainers and 72 decliners.

Turnover was driven by SAMP (Rs. 595 million), HNBN (Rs. 275 million), and JKH (Rs. 175 million). Off-board transactions accounted for 35% of turnover driven by block trades in SAMP (Rs. 462 million), and HNBN (Rs. 263 million). COMBN (+17 points), JKH (+13 points), and SAMP (+12 points) came in as the biggest index movers for the day.

First Capital said the bourse closed on a positive note as the index halted in the green zone at 9,434 gaining 95 points. During the early hours of trading the index took a downward hit as a result of the uncertainties surrounding the DDR strategies which are expected to be unveiled in the coming days, however towards mid-day the index picked up exceptionally well, influenced by the contribution of the Banking sector counters driven by high-net-worth investor participation. Moreover, the market was able to keep up the positive sentiment for the fourth consecutive day mainly due to the improved investor participation on the blue chip counters and banks. Furthermore, reactivated retail participation continued to contribute positively through small and mid-cap shares justifying the bullish sentiment.

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Hatton National Bank and Sampath Bank. Mixed interest was observed in Commercial Bank, Melstacorp and Hayleys, whilst retail interest was noted in Softlogic Capital, Amana Bank and

Browns Investments.

The Banking sector was the top contributor to the market turnover (due to Sampath Bank, Hatton National Bank and Commercial Bank), whilst the sector index gained 2.35%. The share price of Sampath Bank increased by Rs. 1.40 (2.53%) to close at Rs. 56.70. The share price of Hatton National Bank gained Rs. 1.50 (1.09%) to close at Rs. 138.50. The share price of Commercial Bank appreciated by Rs. 2.20 (3.33%) to close at Rs. 68.30.

The Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index increased by 2.48%. The share price of John Keells Holdings moved up by Rs. 4.25 (2.93%) to close at Rs. 149.50.

Softlogic Capital was also included amongst the top turnover contributors. The share price of Softlogic Capital recorded a gain of Rs. 0.40 (4.00%) to close at Rs. 10.40.