CSE fails to cheer historic landslide NPP victory

The Colombo stock market appeared less enthusiastic yesterday in terms of cheering the landslide victory of President Anura Kumara Dissanayake’s National People’s Power (NPP) at last week’s General Election.



In its first day of trading since the election, the benchmark ASPI gained by only 0.2% and the active S&P SL20 by 0.08%. Turnover, however, was above average at Rs. 5.5 billion involving 223.5 million shares.

In contrast, during the pre-election week, the ASPI gained by 3.1% and the S&P SL20 by 3.8%.

In that context, the response from investors in the Colombo stock market yesterday was indifferent according to analysts. 

At Thursday’s election, the NPP, on its way to securing an impressive 159 seats and a commanding supermajority in Parliament, set several records.

The NPP achieved the highest percentage ever obtained by a party in a General Election, securing 61.56% of the total vote, surpassing the previous record of 60.33% set by the United People’s Freedom Alliance (UPFA) in 2010. The NPP also made history by winning 152 electoral divisions, the highest number ever achieved in a General Election, surpassing the previous record of 136 electoral divisions by the UPFA.

The party’s victory extended beyond just electoral divisions as it also claimed victory in 21 out of 22 electoral districts, another record-breaking achievement, besting the 19 districts won by the UPFA in 2010. 

With 6,863,186 votes, the NPP has also secured the highest number of votes in a General Election, surpassing the 6,853,960 votes garnered by the Sri Lanka Podujana Peramuna (SLPP) in 2020. 

Despite these impressive feats, investors at the CSE were lacklustre. However, thanks to the recent rally, year-to-date, the ASPI is up 25% and the S&P SL20 by 29.7%. Some analysts said that the market had gained prior to the election in anticipation of a strong mandate for the NPP.

First Capital said the broad market maintained its bullish momentum, extending the positive sentiment from the previous week’s close, driven by the political stability that bolstered investor confidence. 

Amidst the increased participation from retail and high net worth investors, the ASPI closed in green at 13,231, gaining 32 points, marking a 0.24% increase from the previous week. 

The most significant contributors towards the positive index were COMB, HNB, SPEN, SAMP, and MELS. Additionally, selected Banking sector and blue-chip stocks saw increased interest during the day. 

Amidst several crossings and increased participation from investors, turnover marked a 69.2% increase from the monthly average. The Banking sector led the turnover by 34%, followed by the Capital Goods and Food, Beverage and Tobacco sectors jointly contributing 32% of the overall turnover. Foreign investors remained net sellers with a net outflow of Rs. 761.2 million.

NDB Securities said the ASPI closed in green yesterday as a result of price gains in counters such as Commercial Bank, Hatton National Bank, and Aitken Spence.

High net worth and institutional investor participation was noted in John Keells Holdings, Sampath Bank, and Ambeon Capital. Mixed interest was observed in Hatton National Bank, Commercial Bank, and Browns Investments whilst retail interest was noted in SMB Leasing, Kotagala Plantations, and Panasian Power.

The Banking sector was the top contributor to the market turnover (due to Sampath Bank, Commercial Bank, and Hatton National Bank) whilst the sector index gained 0.70%. The share price of Sampath Bank gained Rs. 0.70 to Rs. 96.80. The share price of Commercial Bank moved up by Rs. 1.50 to Rs. 124. The share price of Hatton National Bank recorded a gain of Rs. 2 to Rs. 235.75.

The Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index decreased by 0.92%. The share price of John Keells Holdings decreased by Rs. 0.30 to Rs. 21.20.

Ambeon Capital was also included amongst the top turnover contributors with its share price closing flat at Rs. 14.50.