Colombo stock market gathers more momentum on banks, net foreign buying Rs. 1.5 b

• Investor sentiment boosted by 94% of remaining holders of dollar denominated Sri Lanka Development Bond agreeing to exchange for longer term rupee bonds
• Deals on NDB dominate turnover

The Colombo stock market gathered further momentum yesterday with local and foreign investor interest on banking and finance stocks boosted indices and turnover to nearly Rs. 7 billion. 

The active S&P SL20 gained by 2% and the benchmark ASPI by 1.1% boosting year to date returns - ASPI up 36.4% and the S&P SL20 up 28.6%. Turnover was Rs. 6.6 billion involving 186.8 million shares. Banking sector accounted for 50% of the turnover.  

Foreigners were also bullish resulting in a net buying of Rs. 1.5 billion, highest for 2023.

Asia Securities said the indices trended upwards driven by the buoyant momentum in banking sector counters and conglomerates. 

COMBN (+4.7%), COMBX (+2.3%), SEYBN (+7.1%), SEYBX (+3.2%), SAMP (+3.6%), UBC (+5.6%), NTBN (+2.8%), and HNBX (+1.4%) led the rally in the banking sector while heavyweights HHL (+6.0%), JKH (+2.9%), LOLC (+1.9%), MELS (+4.3%), DIAL (+4.5%), and BRWN (+5.1%) saw notable buying interest, adding strength to the ASPI. Mid-cap stocks MGT (+7.1%), DIST (+4.3%), CCS (+2.4%), and HAYC (+4.2%) saw continuous accumulation from investors. 

COMBN (+34 points) came in as the biggest index mover during the session, followed by SAMP (+24 points), MELS (+16 points), and JKH (+16 points). Overall, 96 stocks climbed higher while 108 settled with price losses.

Market turnover was led by NDB (Rs. 1.3 billion), JKH (Rs. 441 million), and HNBN (Rs. 392 million). 

Foreigners recorded a net inflow of Rs. 1.5 billion while their participation increased to 15.4% of turnover (previous day 7.6%). Net foreign buying topped in NDB at Rs. 547.8 million, JKH (LKR 179 million), LOLC (LKR 157 million), and COMBN (LKR 155 million) and selling topped in CCS.N at Rs. 26.4 million.

First Capital said the Bourse thrived in the green zone for the 5th straight session largely led by Banking counters over renewed investor confidence after more than 94% of remaining holders of dollar denominated Sri Lanka Development Bond holders agreed to exchange for longer term rupee bonds. 

The index continued its upward trajectory during the day to close at 11,582 gaining 136 points. Besides Banking counters, investors rallied on Treasury counters following the dip in auction yields while counters with strong fundamentals too attracted active participation with the expectation of positive earnings outcome. 

However, selling interest intensified on LIOC as investors took a sidestep after Sinopec Energy announced the arrival of its first two consignments of fuel. First Capital also said the market saw a 3.5% stake change of NDB where 13.2 million shares were traded off-board.

NDB Securities said high net worth and institutional investor participation was noted in National Development Bank, Ceylon Cold Stores, and John Keells Holdings. Mixed interest was observed in Hatton National Bank, Expolanka Holdings and Commercial Bank whilst retail interest was noted in Browns Investments, Union Bank and Pan Asia Banking Corporation. 

The Banking sector was the top contributor to the market turnover (due to National Development Bank, Hatton National Bank and Pan Asia Banking Corporation) whilst the sector index gained 3.09%. The share price of National Development Bank increased by One Rupee to Rs 80.90. The share price of Hatton National Bank moved up by Rs 3.50 to Rs 200. The share price of Pan Asia Banking Corporation recorded a gain of Rs 2 to Rs 18.60.

The Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index increased by 1.44%. The share price of John Keells Holdings gained Rs 5 to Rs 175.

Expolanka Holdings was also included amongst the top turnover contributors. The share price of Expolanka Holdings appreciated by Rs 2.50 to Rs. 150.75.