Colombo stock market rebounds

The Colombo stock market bounced back yesterday with buying returning on improved sentiment and apparent waning of concerns over new taxation. 

The benchmark ASPI gained by over 108 points or 1.2%  and the active S&P SL20 improved by 1.3% or 35 points. Turnover was Rs. 2.3 billion involving 66.4 million shares.

Asia Securities said following three sessions of downward momentum, the indices bounced back into positive territory as investors digested the Government’s tax hikes announcement and returned to front-line stocks cashing in on the recent pullback which had already factored in the impending tax changes to a certain extent.

Earlier, the ASPI touched a nine-week low of 8,522 (-223 points) as investors sidelined in early trading, awaiting directional cues post the tax hikes announcement. However, the market rebounded strongly with the indices reversing course, underpinned by a sharp recovery in front-line stocks. 

The ASPI surged past the 8,700 levels and remained firm to surpass the 8,800 mark in mid-afternoon trading. The index continued its momentum in the second half of the session and trended towards the 9,000 mark before settling at 8,853 (+108 points).

Notably, EXPO (+6.9%), ACL (+7.7%), RCL (+7.0%), SUN (+6.7%), and VONE (+6.9%) supported the recovery momentum during the session, however price losses in SAMP (-5.4%), AGST (-1.9%), and DIAL (-1.2%) added downward pressure on the ASPI. Turnover was led by LIOC (Rs. 551 million), EXPO (Rs. 380 million), and ACL (Rs. 195 million). The breadth of the market turned positive with price gainers outnumbering decliners by a margin of 129 to 80.

Asia also said foreigners recorded a net inflow of Rs. 31.3 million while their participation was flat at 1.3% of turnover (previous day 14.8%). Net foreign buying topped in COMB.N at Rs. 22.4 million and selling topped in ASIR at Rs. 4 million.

First Capital said after consecutive losses in the last three sessions, ASPI bounced back to green displaying a sharp recovery as investor sentiment turned positive with speculations on corporate tax put to rest following the Gazette issue on Friday. 

Index took a plunge as the market opened but soon reversed the negative momentum as investors bargain hunted on beaten down stocks including retail favourites EXPO and LIOC and continued to recover losses before closing for the day at 8,853 gaining 109 points.

NDB Securities high net worth and institutional investor participation was noted in John Keells Holdings, CIC Holdings (voting and nonvoting) and Royal Ceramics. Mixed interest was observed in Lanka IOC, Expolanka Holdings and ACL Cables whilst retail interest was noted in Browns Investments, LOLC Finance and SMB Leasing.

Energy sector was the top contributor to the market turnover (due to Lanka IOC) whilst the sector index gained 0.92%. The share price of Lanka IOC increased by Rs. 1.50 (0.71%) to close at Rs. 213.50.

The Capital Goods sector was the second highest contributor to the market turnover (due to ACL Cables and John Keells Holdings) whilst the sector index increased by 1.95%. The share price of ACL Cables moved up by Rs. 6.70 (7.69%) to close at Rs. 93.80. The share price of John Keells Holdings closed flat at Rs. 128.50.

Expolanka Holdings and Browns Investments were also included amongst the top turnover contributors. The share price of Expolanka Holdings gained Rs. 10 (6.90%) to close at Rs. 155. The share price of Browns Investments recorded a gain of 10 cents to close at Rs. 6.20.