Colombo stock market remains bearish despite RW camp optimism

The Colombo stock market remained bearish amidst lacklustre investor participation much akin to upbeat pro-Government support.

Asia Securities said the market dipped for a sixth consecutive session on Tuesday mainly dragged by price losses in CFVF (-5.9%), FCT (-4.1%), LIOC (-3.0%), SAMP (-2.1%), MGT (-3.4%), and DIAL (-2.1%).

After reaching 10,717 (+29 points) at market open, the ASPI reversed course and remained in the red for the entire session to eventually close at 10,647 (-41 points), SAMP (-11 points), DFCC (-5 points), and COMBN (-5 points) came in as the biggest laggards on the ASPI. Overall, 72 stocks ended in green while 101 settled with losses.

Turnover was led by JKH (Rs. 159 million) and DIAL (Rs. 101 million).

Asia also said foreigners recorded a net outflow of Rs. 12.2 million. Net foreign buying topped in JKH at Rs. 14.6 million and selling topped in MELS.N at Rs. 5.5 million.

First Capital said the market sentiment took a downturn throughout the day, primarily in response to the cabinet’s approval of a VAT hike from the current 15% to 18%, effective from January 2024. This led to a loss of momentum in the market, culminating in a closing figure of 10,647, down 41 points in the red zone.

Among the day’s most actively traded shares, the Consumer sector was prominent, driven by expectations of price increases resulting from the VAT adjustment and the associated profit margins. Treasury shares experienced selling pressure, partly due to anticipations of wealth tax implications from the upcoming budget and the rejection of the Treasury bond auction.

In the realm of top traded shares, JKH continued to dominate with foreign buying, accumulating Rs. 4.6 million during the day, while DIAL witnessed foreign selling totalling Rs. 3.8 million. The market turnover tallied at Rs. 739.6 million, marking a 17.6% decrease from the monthly average turnover of Rs. 897.7 million. Notably, the Capital Goods and Food, Beverage, and Tobacco sectors collectively contributed 51% to the overall turnover.

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Dialog Axiata and Aitken Spence. Mixed interest was observed in Ceylon Grain Elevators, Lanka Milk Foods and Lanka IOC whilst retail interest was noted in Browns Investments, People’s Leasing & Finance and LOLC Finance.

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings and Aitken Spence) whilst the sector index lost 0.26%. The share price of John Keells Holdings decreased by 25 cents to Rs. 192.25. The share price of Aitken Spence recorded a loss of Rs. 1.75 to Rs. 128.

The Food, Beverage & Tobacco sector was the second highest contributor to the market turnover (due to Ceylon Grain Elevators and Lanka Milk Foods) whilst the sector index edged up by 0.07%. The share price of Ceylon Grain Elevators moved up by Rs. 1.75 to Rs. 166. The share price of Lanka Milk Foods appreciated by Rs. 3.25 to Rs. 166.

Dialog Axiata was also included amongst the top turnover contributors. The share price of Dialog Axiata lost 20 cents to Rs. 9.40. Market dipped for a sixth consecutive session on Tuesday mainly dragged by price losses in CFVF (-5.9%), FCT (-4.1%), LIOC (-3.0%), SAMP (-2.1%), MGT (-3.4%), and DIAL (-2.1%).