CSE loses Rs. 254 b in value so far in October as negative investor sentiment persists

The Colombo stock market suffered a Rs. 254 billion worth loss of value so far in October due to negative investor sentiment over lack of credible progress in resolving some of the major macroeconomic issues.  

The market capitali sation of the CSE was Rs. 4.537 trillion as at end September and by yesterday it had dipped to Rs. 4.283 trillion reflecting a drop of quarter billion rupees.

The benchmark ASPI has lost 7% in the first 13 market days of October so far whilst for the active S&P SL20 it has been 8%. 

Delay in securing the next release of IMF funding, external debt restructuring, continued downturn in manufacturing and export sector are among investor concerns. 

However year to date, ASPI has offered a 24.4% return and 11.6% by S&P SL20 thanks to gains in the earlier part of the year.

The CSE yesterday marked its fourth consecutive dip amidst low turnover due to lacklustre investor interest. The ASPI was down by 1% and the ASPI by 0.8%. Turnover was Rs. 822.6 million involving 38 million shares.

Asia Securities said the indices trended downwards throughout the session dragged by BIL (-3.8%), CALT (-4.5%), MGT (-4.6%), HAYL (-3.2%), RCL (-2.5%), and CIC (-2.1%). However, LHCL saw a 7.1% increase following the Government’s announcement of the Expression of Interest (EOI) for the sale of its stake in the company. 

From a technical point of view, the ASPI is retesting key retracement support zone 10,600 – 10,500 while approaching oversold Relative Strength Index (RSI) levels for the first time since August 2023 swing high levels. MELS (-14 points), HNBN (-9 points), and HAYL (-7 points) came in as the biggest laggards on the ASPI. Turnover was led by CTHR (Rs. 93 m), JKH (Rs. 64 m), and FCT (Rs. 64 m). 

Asia said foreigners recorded a net outflow of Rs. 3.3 million. Net foreign buying topped in JKH at Rs. 23 million and selling topped in FCT at Rs. 12 million. October has so far seen a net foreign inflow of Rs. 121.4 million whilst for the year the figure is Rs. 3.8 billion.

First Capital said the Bourse closed in the red for the fourth consecutive session amidst continuous price declines stemming from index heavy weights and banks. 

It said the ASPI moved negatively throughout the session and closed at 10,557 losing 90 points with investors resorting to the sidelines seeking direction on the upcoming budget. However, SOEs namely SLTL and LHCL were among the top positive contributors to the ASPI owing to on-going privatisation talks. Investors showed interest on Treasury counters, with anticipated decline in yields at the weekly T-Bill auction while defensive counters too enticed slight buying in the midst of uncertain market sentiment. 

NDB Securities said high net worth and institutional investor participation was noted in C T Holdings, John Keells Holdings and LB Finance.

Mixed interest was observed in First Capital Treasuries, Lanka IOC and First Capital Holdings whilst retail interest was noted in Browns Investments, Eden Hotel Lanka rights and UB Finance Company. The Diversified Financials sector was the top contributor to the market turnover (due to First Capital Treasuries and LB Finance) whilst the sector index lost 0.70%. The share price of First Capital Treasuries moved down by 30 cents to Rs. 40.70. The share price of LB Finance appreciated by 30 cents to close at Rs. 61.30.

The Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index decreased by 0.48%. The share price of John Keells Holdings gained 25 cents to Rs. 190.25.

C T Holdings and Lanka IOC were also included amongst the top turnover contributors. The share price of C T Holdings closed flat at Rs. 252.50. The share price of Lanka IOC recorded a loss of 90 cents to Rs. 99.10.