Battered stock market rebounds as bargain hunters return

The battered Colombo stock market bounced back yesterday for the first time since 5 April as bargain hunters returned collecting low priced fundamentally sound stocks.

The active S&P SL20 Index gained by nearly 11% and the benchmark ASPI improved by over 5% much to the relief of diehard investors. The rebound was after the market had dipped by 10% in the past two days wiping out Rs. 600 billion in value. Until yesterday the market was down by over 40% year to date and market capitalisation down by Rs. 2.6 trillion.

Turnover improved to Rs. 2.18 billion involving 144.6 million shares.

Expolanka, Royal Ceramics, Browns Investments, LOLC and Hayleys boosted the market’s gain.

First Capital said the bourse rallied with a massive gain fuelling bullish optimism while closing the day in the green territory after five consecutive losses.

“Even though the index tumbled in the beginning, the market gradually recovered from the earlier losses as investors were brimming with confidence after retail favourite counters started to escalate. Market climbed steadily throughout the remainder of the session,” First Capital said, adding turnover included 15% is contributed by crossing transactions mainly from banking counters. Therefore, overall turnover is mainly led by Transportation and Banking sectors accounting for a joint contribution of 53%.

Foreign investors remained net buyers at Rs. 35 million while recording low participation.

NDB Securities said high net worth and institutional investor participation was noted in Commercial Bank, Windforce Ltd. and Sampath Bank. Mixed interest was observed in LOLC Holdings, Royal Ceramics and Expolanka Holdings whilst retail interest was noted in Browns Investments, SMB Leasing voting and LOLC Finance.

Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings) whilst the sector index gained 44.64%. The share price of Expolanka Holdings increased by Rs. 44.45 (44.76%) to close at Rs. 143.75.

The Banking sector was the second highest contributor to the market turnover (due to Commercial Bank) whilst the sector index increased by 0.88%. The share price of Commercial Bank voting gained 40 cents (0.80%) to close at Rs. 50.40.

Browns Investments, LOLC Finance and Windforce were also included amongst the top turnover contributors. The share price of Browns Investments moved up by Rs. 1.50 (36.59%) to close at Rs. 5.60. The share price of LOLC Finance recorded a gain of Rs. 1.20 (24.00%) to close at Rs. 6.20. The share price of Windforce appreciated by Rs. 0.90 (6.67%) to close at Rs. 14.40.