Election hype short-lived: Stock market investors fail to cheer SLPP landslide

The Colombo Bourse yesterday failed to sparkle on the news of the unprecedented victory by Sri Lanka Podujana Perumana (SLPP) as stock price indices were mixed or lacklustre. 

The All Share Price Index in fact closed negative (0.37 points or 0.01%) whilst the S&P SL 20 Index managed to gain by only 10 points or 0.4%. Turnover however was healthy at Rs. 1.6 billion, up from Rs. 889 million on Thursday.

The SLPP’s victory by a two-thirds majority at Wednesday’s Parliamentary Election is seen as a major boost for political stability which businesses and investors yearn for.

In that context most analysts were expecting the stock market gain sharply yesterday and the outcome disappointed die-hard supporters of SLPP. 

However others said the market had previously factored in a convincing victory by SLPP though there were doubts about securing the two-thirds majority. 

Despite lacklustre performance yesterday, the ASPI posted its third straight weekly gain, closing the week 1% higher. S&P SL20 gained 2.18% for the week.

Despite weekly gains on and off in recent months, year-to-date ASPI is down 15.5% and S&P SL 20 lower by 24%. Net foreign selling has increased to Rs. 25 billion year to date as well. 

First Capital said profit-taking of retailers made the hype of the election outcome short-lived, reverting the ASPI down to the red zone while S&P SL20 survived in the green zone. 

It said market recorded a short uptrend movement within the first few minutes of trading, thereafter experienced a steep fall and a sideways stagnant movement till the rest of the day and closed at 5,176 losing merely 0.4 points. 

Turnover recorded a three-week high on the back of Capital Goods sector led by John Keells Holdings and Access Engineering. Foreign investors recorded low participation while completing a week of sell-side dominance.

NDB Securities said the ASPI edged down as a result of price losses in counters such as Nestle Lanka, Commercial Leasing & Finance and Dilmah Ceylon Tea Company.

It said high net worth and institutional investor participation was noted in Access Engineering and Commercial Bank. Mixed interest was observed in John Keells Holdings and LOLC Holdings, whilst retail interest was noted in Dialog Axiata, Tokyo Cement Company voting and non-voting. 

Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings and Access Engineering) whilst the sector index gained 0.44%. The share price of John Keells Holdings increased by Rs. 1 (0.88%) closing at Rs. 114.90 whilst foreign holdings decreased by 500,000 shares. The share price of Access Engineering lost Rs. 0.30 (1.38%) to close at Rs. 21.40.

The Banking sector was the second highest contributor to the market turnover (due to Commercial Bank and Hatton National Bank) whilst the sector index increased by 0.21%. The share price of Commercial Bank moved down by Rs. 0.10 (0.13%) to close at Rs. 76.90 while the share price of Hatton National Bank appreciated by Rs. 1.40 (1.24%) to close at Rs. 114.70. 

LOLC Holdings was also included amongst the top turnover contributors. The share price of LOLC Holdings recorded a gain of Rs. 0.70 (0.51%) to close at Rs. 137.60.

Talawakelle Tea Estates announced an interim dividend of Rs. 2.75 per share.