CSE remains negative with turnover hitting multiple-months low

The Colombo stock market yesterday saw turnover dipping to new low amidst subdued level of investor activity.

Both indices were down by over 0.5% and turnover hit a multiple month low of Rs. 784 million involving 36.8 million shares.

On a weekly basis, the ASPI edged down 0.34 points while the S&P SL20 dropped 3.85 points. Market activity was moderate throughout the week with daily turnover averaging Rs. 1,219 million, declining from Rs. 2,198 million recorded last week.

Asia Securities said the Indices on Friday were dragged down by CALT (-1.0%), DIAL (-1.8%), DIST (-2.2%), ACL (-1.1%), MELS (-1.5%), and SAMP (-1.5%). 

However, MGT (+1.3%) closed in green following mild profit-booking in the previous session while AEL (+3.6%), CICN (+1.9%), CICX (+1.8%), and AGST (+1.9%) saw renewed buying interest. The breadth of the market remained negative with 65 price gainers and 110 decliners.

On the activity front, turnover dropped to a two-month low as investors remained on the side-lines amidst the ongoing IMF EFF program review and market speculations about the upcoming budget. 

Foreigners recorded a net inflow of Rs. 32.8 million. Net foreign buying topped in MGT.N at Rs. 20.3 million and selling topped in NTB.N at Rs. 9 million ($ 28,000). 

First Capital said the market exhibited a promising start during the morning session, but as the day progressed, it gradually transitioned into a downward trajectory, primarily attributed to Fitch Ratings’ recent downgrade of Sri Lanka’s Long-Term Local-Currency Issuer Default Rating from ‘C’ to ‘RD’ (Restricted Default). In response to this rating adjustment, the banking sector encountered modest selling pressure over the course of the day. Despite this, trading volumes remained relatively thin driven by concerns surrounding the upcoming IMF review and the impending budget. Notably, MGT topped the turnover, with active investor participation driven by high expectations for promising results in the upcoming quarter. Furthermore, there was increased activity in construction-related stocks, such as AEL, LALU, and PLR, possibly buoyed by improved sentiment stemming from project developments such as the Japan-funded LRT project. However, the market turnover plummeted to over a 3-month low, marking a 69% decline from the monthly average of Rs. 2.5 billion whilst the Capital Goods sector contributed 23% to the overall turnover.

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Hayleys Fabric, and Access Engineering. Mixed interest was observed in Expolanka Holdings, Hayleys and Capital Alliance whilst retail interest was noted in Marawila Resorts, Agstar and Browns Investments. 

The Capital Goods sector was the top contributor to the market turnover (due to Access Engineering, Hayleys and John Keells Holdings) whilst the sector index edged down by 0.10%. The share price of Access Engineering gained 70 cents to Rs. 20. The share price of Hayleys recorded a loss 60 cents to Rs. 96.60. The share price of John Keells Holdings closed flat at Rs. 190.

The Food, Beverage and Tobacco sector was the second highest contributor to the market turnover whilst the sector index decreased by 0.99%. 

Hayleys Fabric and Expolanka Holdings were also included amongst the top turnover contributors. The share price of Hayleys Fabric increased by 60 cents to Rs. 47.50. The share price of Expolanka Holdings moved up by 25 cents to Rs. 141.75.