CSE ends February on the up but bearish sentiment remains

The Colombo stock market remained negative for the second consecutive day but ended February on the up thanks to gains in the early part of the month. 

During the month, the ASPI and the S&P SL20 gained 3.6% and 1.2% respectively. In January ASPI gained 4.4% and S&P SL20 by 4.9%.

Average daily turnover in February was Rs. 1.8 billion, almost the same as in January.

Yesterday investor sentiment remained bearish with ASPI was down by 10 points and the S&P SL20 by 8 points. Turnover was Rs. 1.4 billion involving 50.3 million shares.

Asia Securities said following an early dip, the indices recovered to close marginally lower as front-line stocks moved in opposite directions amidst continued profit-taking in banking sector counters.

 HNB (-2.6%), LLUB (-7.8%), ABL (-1.7%), ACL (-1.4%), LOFC (-1.6%), RCL (-2.3%), DIPD (-1.3%), NDB (-2.4%), and NTB (-2.7%) closed in red while SAMP (+4.2%), SCAP (+3.8%), AAIC (+4.0%),  CALT (+2.2%), and GLAS (+1.4%) recorded price gains cushioning the ASPI’s downside during the session. Overall, 85 stocks recorded price gains while 92 ended with losses.

Turnover improved led by HNB (Rs. 204 million), LIOC (Rs. 194 million), and JKH (Rs. 184 million). Off-board transactions amounted to Rs. 231 million on crossings in LIOC (Rs. 141 million), JKH (Rs. 50 million), and SPEN (Rs. 40 million). A net foreign inflow of Rs. 34 million was recorded during the session led by HNB (Rs. 38 million) and JKH (Rs. 17 million). 

First Capital said the bourse closed in red for the second consecutive session as retail participation significantly weakened as a wait-and-see approach was instilled ahead of the trade union strike today. 

The Index moved with some volatility during the session following a steep plunge during the initial few minutes. However, investor interest spanned on Banking sector counters (mainly COMB, NTB and SAMP) yet again as IFC provided a cross-country swap of $ 400 million to the country’s leading banks. 

Moreover, hotel sector counters witnessed interest during the day on the back of boosting the tourism sector as tourist arrivals are at record highs after the pandemic. However, the market closed marginally lower with LLUB contributing largely negatively to the ASPI as the stock edged low over poor quarter results where earnings plunged by 52.4%YoY to Rs. 431.0 million owing to higher taxes.

NDB Securities said high net worth and institutional investor participation was noted in Lanka IOC, John Keells Holdings and Aitken Spence. Mixed interest was observed in Hatton National Bank, Expolanka Holdings and Sampath Bank whilst retail interest was noted in Union Bank, Softlogic Capital and SMB Leasing. 

The Banking sector was the top contributor to the market turnover (due to Hatton National Bank and Sampath Bank) whilst the sector index edged up by 0.06%. The share price of Hatton National Bank decreased by Rs. 2.75 (2.55%) to Rs. 105. The share price of Sampath Bank appreciated by Rs. 2.10 (4.23%) to Rs. 51.70.

The Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index decreased by 0.36%. The share price of John Keells Holdings moved down 75 cents to Rs. 135.

Lanka IOC and Expolanka Holdings were also included amongst the top turnover contributors. The share price of Lanka IOC dipped 25 cents to Rs. 198. The share price of Expolanka Holdings recorded a loss of Rs. 1.50 to Rs. 178.50.