CSE turns negative signalling investors not overly excited by Budget

•  Investors adopt wait-and-see approach assessing implications of Budget – Asia Securities
•  Investors on sidelines awaiting clarity on the debt restructuring process – First Capital

The Colombo stock market turned negative yesterday prompting some to speculate that investors weren’t overly excited by the 2024 Budget presented by President Ranil Wickremesinghe on Monday.

In its first proper post-Budget session, the active S&P SL20 declined by 1.5% and the benchmark ASPI by 1.1%. 

Turnover was Rs. 891.5 million involving 37 million shares. Foreigners were net sellers as well.

Asia Securities said the indices moved downwards as investors adopted a wait-and-see approach assessing the implications of Monday’s Budget reading.

Price losses in MELS (-7.2%), DIAL (-4.3%), SAMPN (-1.0%), CFVF (-2.2%), DIST (-2.9%), HNBN (-2.9%), NTBN (-2.1%), and FCT (-2.7%) dampened investor momentum during the session while SUN (+2.7%), PLC (+1.0%), and AELN (+1.1%) recorded price gains underpinned by better-than-expected quarterly earnings.

The ASPI faced downward pressure during the session, primarily due to negative contributions from MELS (-28 points), HNBN (-15 points), COMBN (-12 points), CTHR (-10 points), and JKH (-7 points). Overall, 53 stocks ended in green while 110 settled with losses.

Turnover was led by JKH (Rs. 151 mn), CALT (Rs. 87 mn), and DIAL (Rs. 49 mn).

After five consecutive sessions of net foreign inflows, foreign investors ended on the selling side, resulting in a net outflow of Rs. 72 mn. JKH led the selling activity with a net foreign outflow of Rs. 83 million.

First Capital said the Bourse recorded a reversal and closed the day in the red zone as investors remained on the sidelines awaiting clarity on the debt restructuring process, which overshadowed the positive implications of the 2024 Budget proposal.

Profit-taking was witnessed on Banks and index heavy weights following sizable price gains witnessed during the previous sessions. Also, lingering selling pressure on MELS further dragged the index down below the 10,800 level as the dividend of Rs. 4.27 per share reached the XD date.

The index closed at a 2-week low of 10,775, losing 123 points.

On a positive note, the Hotel sector displayed mixed sentiment, with tourist arrivals for the first 12 days of November surpassing 55,000, signalling notable improvement amid the peak season.

NDB Securities said high net worth and institutional investor participation was noted in Sampath Bank, Ceylon Tobacco Company and Central Finance Company. Mixed interest was observed in Dialog Axiata, Nations Trust Bank and Hayleys whilst retail interest was noted in Capital Alliance, First Capital Holdings and Browns Investments.

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings) whilst the sector index lost 0.98%. The share price of John Keells Holdings decreased by Rs. 2.25 to Rs. 192.50.

The Diversified Financials sector was the second highest contributor to the market turnover (due to Capital Alliance) whilst the sector index edged up by 0.09%. The share price of Capital Alliance gained 80 cents to Rs. 68.90.

Dialog Axiata, Sampath Bank and Nations Trust Bank were also included amongst the top turnover contributors. The share price of Dialog Axiata moved down by 40 cents to Rs. 9. The share price of Sampath Bank recorded a loss of 70 cents to Rs. 68.70. The share price of Nations Trust Bank declined by Rs. 2.25 to Rs. 105.