CSE rebounds after 5-day fall

The Colombo stock market bounced back yesterday on the back of improved investor sentiment and bargain hunters after a five-day fall.

Both indices gained by over 1.3% though turnover was below the Rs. 1 billion mark at Rs. 999.3 million involving 29.1 million shares.

Asia Securities said following five sessions of downward momentum, the market witnessed a respite as investors returned to front-line stocks cashing in on recent price drops.

The ASPI, having lost 405 points over the past five sessions and approaching the immediate support levels of 10,600, recorded its highest single-day price gain (143 points) in the last five weeks, surpassing the 10,800 mark. FCT (+4.2%) and CFVF (+5.4%) continued their upward movement for a second session following FCT’s dividend announcement yesterday. In addition, active stocks JKH (+1.3%), CALT (+2.2%), SAMP (+2.1%), PABC (+4.4%), LIOC (+2.6%), NTBN (+3.2%), DFCC (+4.5%), and EXPO (+4.0%) recovered some of their losses from previous sessions. The breadth of the market turned positive with 102 price gainers and 67 decliners.

Turnover was led by JKH (Rs. 240mn), FCT (Rs. 148mn), and CFVF (Rs. 108mn).

CIC Holdings PLC (CIC) announced its recent agreement with key shareholders of John Keells Holdings PLC (JKH). Under this agreement, CIC has secured an irrevocable unconditional proxy over their voting rights in JKH for a period of ten years. As per the agreement, CIC’s holding of the voting rights in JKH is at 25.3%. However, in line with accounting standards, CIC will apply equity accounting solely for its holdings and its subsidiaries’ holdings in JKH, currently at 6.1% of the issued shares from 3Q 2024.

Through a corporate disclosure, Cargills (Ceylon) PLC (CARG) announced its joint venture agreement with the National Dairy Development Board of India (NDDB) and Gujarat Cooperative Milk Marketing Federation Ltd (Amul) to boost domestic milk production. Under this arrangement, CARG will maintain a 49% ownership in the new joint venture.

Asia also said foreigners recorded a net inflow of Rs. 3.6mn. Net foreign buying topped in JKH at Rs. 7.9mn and selling topped in NDB at Rs. 5.3mn.

First Capital said the bourse witnessed a resurgence after weathering 5 consecutive days of losses, closing the day on a positive note at 10,818, marking a gain of 143 points. Market sentiment received a significant boost as news broke about the preliminary debt agreement between the Exim Bank of China and Sri Lanka, prompting increased activity on shares across the board. Notably, as rates eased during yesterday’s bond auction, interest in treasury shares grew.

In the wake of foreign selling observed in recent sessions, renewed interest materialized in the banking sector, notably in shares of HNB, SAMP, and DFCC.

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings and Asian Hotels & Properties. Mixed interest was observed in First Capital Treasuries, First Capital Holdings and Capital Alliance whilst retail interest was noted in Renuka Agri Foods, Browns Investments and Softlogic Capital.

The Diversified Financials sector was the top contributor to the market turnover (due to First Capital Treasuries, First Capital Holdings and Capital Alliance) whilst the sector index gained 1.79%. The share price of First Capital Treasuries gained Rs 1.70 to Rs 41.80. The share price of First Capital Holdings moved up by Rs 2.70 to Rs 52.80. The share price of Capital Alliance appreciated by Rs 1.40 to Rs 64.60.

The Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index increased by 0.89%. The share price of John Keells Holdings increased by Rs 2.50 to Rs 191.

Asian Hotels & Properties was also included amongst the top turnover contributors. The share price of Asian Hotels & Properties recorded a gain of one Rupee to Rs 60.