CSE gains sharply on positive news from banks; IMF deal

The Colombo stock market yesterday produced one of its sharpest gains in the New Year with both indices up by over 2% as investors stepped up buying on positive news including from the banking sector in the form of dividends.

The benchmark ASPI gained by 2.6% or 234 points to revert to 9,083 point level. The active S&P SL20 rose by 2.4%.

Turnover was Rs. 2.28 billion involving 98.2 million shares. Asia Securities said the market commenced the week on an upbeat note with the ASPI hitting the 9,000 level on the back of a sharp 234-point gain (+2.6%).

Banks and finance sector stocks recorded sizeable gains during the session, boosted by positive investor sentiments from the ongoing IMF talks to consider approving the $ 2.9 billion Extended Fund Facility (EFF) to Sri Lanka without China’s assurances of debt-restructuring support.

Resultantly, the banking sector index recorded the biggest gain for the day (+8.0%) with price gains in SAMP (+10.9%), SEYBN (+13.0%), SEYBX (+10.6%), HNBN (+10.9%), HNBX (+7.2%), UBC (+14.7%), COMBN (+4.5%), COMBX (+6.1%), NDB (+9.1%), NTBN (+5.4%), and NTBX (+10.1%).

Turnover was led by HHL (Rs. 349 million), SAMP (Rs. 205 million), and SLTL (Rs. 175 million). 

Foreigners ended on the selling side with a net outflow of Rs. 46 million led by HHL (Rs. 198 million) while SPEN drew Rs. 133 million of net inflows on continued foreign buying.

Earlier, the ASPI crossed the 9,000 mark with a gap-up of 233 points and hovered in the range of 9,080-9,100 for the rest of the session. SAMP (+44 points) contributed the most to the ASPI, followed by HNB (+30 points), COMB (+23 points), VONE (+18 points), and HAYL (+18 points). The breadth of the market ended positive with 134 price gainers and 57 decliners.

First Capital said the broad market witnessed a solid gain as the ASPI crossed the 9,000 psychological level for the second time during the month strongly backed by the bullish sentiment from investors after the IMF decided to consider the EFF for Sri Lanka despite China’s assurance on debt restructuring.

On that note, index gained sharply and continued to move on a steady uptrend as high net worth investor interest largely spanned on banking sector counters. Sri Lanka nearing IMF board level agreement further prompted interest on treasury counters while blue-chip counters including HHL saw revitalised buying interest during the day. Potential privatisation talks on SOE’s started to reflect on SLTL which gained sharply during the session as the market closed at 9,082 with a solid gain of 234 points.

NDB Securities said the indices closed in green as a result of price gains in counters such as Sampath Bank, Hatton National Bank and Commercial Bank.

It said high net worth and institutional investor participation was noted in Sampath Bank, JAT Holdings, and Hemas Holdings. Mixed interest was observed in Sri Lanka Telecom, Aitken Spence and Melstacorp whilst retail interest was noted in Amana Bank, SMB Leasing voting & nonvoting and Browns Investments.

The Capital Goods sector was the top contributor to the market turnover (due to Hemas Holdings and Aitken Spence) whilst the sector index gained 0.25%. The share price of Hemas Holdings increased by Rs. 1.40 (2.24%) to Rs. 64. The share price of Aitken Spence gained by 50 cents to 

Rs. 150.

The Banking sector was the second highest contributor to the market turnover (due to Sampath Bank) whilst the sector index increased by 8.00%. The share price of Sampath Bank gained Rs. 4.80 (10.86%) to Rs. 49.00.

Sri Lanka Telecom and Melstacorp were also included among the top turnover contributors. The share price of Sri Lanka Telecom moved up by Rs. 7.70 (10.74%) to Rs. 79.40. The share price of Melstacorp appreciated by one Rupee to Rs. 58.10.

Separately Nestle Lanka announced its first and final dividends of Rs. 55 and Rs. 75 per share respectively.