Dismal week at CSE with 3% loss as investors turn bearish

The Colombo stock market yesterday ended a dismal week reporting 3% loss amidst lacklustre investor interest fuelled by concerns over the macro situation.

The ASPI lost 348.49 points (-3.07%) for the week while the S&P SL20 lost 96.92 points (-3.03%). On the activity front, market turnover averaged Rs. 740 million declining from Rs. 962 million recorded in the previous week.

“The indices showcased a downward trend as investors adopted a “wait-and-see” approach, awaiting cues from the IMF’s second tranche and the outcome of the monetary policy review. Furthermore, speculation around the upcoming budget kept investors on edge throughout the week,” Asia Securities said.

Yesterday the ASPI dropped below the 11,000 mark mainly dragged by price losses in HNBN (-1.1%), CALT (-3.7%), CFVF (-3.6%), WIND (-2.1%), MGT (-1.2%), and DIST (-1.9%). SLTL saw higher investor interest in early trading reaching an intra-day high of Rs. 99.00/share (+5.3%). However, the stock reversed its gains as the session progressed and eventually ended at Rs. 94.40/shares (+0.4%). Overall, 48 stocks ended in green while 100 recorded price losses for the day.

Market activity remained subdued with turnover of Rs. 611 million.

Foreigners recorded a net outflow of Rs. 7.4 million. Net foreign buying topped in JKH at Rs. 27.7 million and selling topped in WIND at Rs. 19 million.

First Capital said the ASPI closed lower yet another day amidst low volumes as investors displayed lacklustre participation on the back of delaying IMF proceedings which overshadowed the positive impact of a recent 100bps policy rate cut.

Although index slightly edged in the beginning, increased selling pressure led to a dip in the market with investors opting for a cautious wait and see approach ahead of the upcoming budget, resulting in the week to close below 11,000 mark.

Active investor participation continued to be observed on SLTL and LHCL following the Government’s release of tentative plans for its initial round of divestitures.

In the midst of low volumes, turnover remained below 48% compared to the monthly average turnover of Rs. 1.2 billion. With the foreign buying interest on JKH, Capital Goods sector contributed 25% to the market turnover followed by banks (15%).

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Hatton National Bank, and Teejay Lanka. Mixed interest was observed in Sri Lanka Telecom, CIC Holdings and Windforce whilst retail interest was noted in Palm Garden Hotels (rights), SMB Leasing nonvoting and Access Engineering.

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings) whilst the sector index lost 0.19%. The share price of John Keells Holdings closed flat at Rs. 190.50.

The Banking sector was the second highest contributor to the market turnover (due to Sampath Bank and Hatton National Bank) whilst the sector index decreased by 1.03%. The share price of Sampath Bank lost 20 cents to close at Rs. 66.80. The share price of Hatton National Bank moved down by Rs. 1.75 to Rs. 163.25.

Sri Lanka Telecom and Teejay Lanka were also included amongst the top turnover contributors. The share price of Sri Lanka Telecom recorded a gain of 40 cents to Rs. 94.40. The share price of Teejay Lanka declined by 10 cents to Rs. 35.