Expolanka weathers downturn in stock market

• Most profitable and valuable firm sees share price top Rs. 300; briefly surpasses Rs. 600 b market capitalisation before settling down at Rs. 594 b
• ASPI closes lower after strong start; LOLC stocks weigh in

The Colombo stock market yesterday closed on a negative note partly due to the high market cap but illiquid stocks of LOLC Group weighing in, whilst investor sentiment was mixed with an element of profit taking.

The All Share Price Index declined by 67 points, or 0.6%, and the S&P SL20 by 0.1%, or 5 points. Turnover dropped to Rs. 5.6 billion whilst volume was very high at 617.4 million shares.

Asia Securities said that following a strong first half boosted by a steady rise in EXPO, the ASPI slipped lower and eventually closed in the red, erasing all of its intra-day gains due to price declines extended by LOLC Group companies. Activity continued at healthy levels with turnover led by retail and HNI buying in EXPO. 

After opening the session at Rs. 299.50, EXPO gained as much as 2.8% at Rs. 308 during the session and witnessed consolidation at Rs. 304 (+1.5%) at market close. In particular, the stock’s market capitalisation surpassed the Rs. 600 billion level during trading hours before closing out at Rs. 594 billion. 

“Earlier, the ASPI commenced the session on a positive note opening up a 50-point gap and remained in green territory till mid-afternoon. As LOLC Group stocks continued to decline, the ASPI dropped into negative territory during closing hours. Leading the decline in the ASPI, CLC contributed 46 negative points to the index, followed by LOFC (-34 points), LOLC (-9 points), BIL (-6 points) and NIFL (-6 points). Overall, 91 stocks ended higher while 104 stocks closed in red,” Asia said. 

It said foreigners recorded a net outflow of Rs. 22 million while their participation declined to 1.5% of turnover (previous day 1.7%). Net foreign buying topped in TKYO.N at Rs. 26.3 million and net selling topped in TAFL.N at Rs. 13.7 million.

First Capital said the bourse closed the day in the negative zone while recording a turnover at a three-and-a-half-week low. “The index continued to pursue a bull run during the early hours of the session while hitting an intraday high of 11,143. Eventually, the market moved sideways with the unfolded selling pressure during mid-day causing a trim down of early gains and closed at 11,021,” First Capital said, adding that LOLC counters were witnessed as the major negative contributors to the ASPI. 

It said turnover was led by a joint contribution of 38% from the Transportation sector and Food, Beverage & Tobacco sector. 

NDB Securities said high net worth and institutional investor participation was noted in Kotagala Plantations. Mixed interest was observed in Expolanka Holdings, Lanka IOC and Lanka Orix Finance, whilst retail interest was noted in SMB Leasing voting and non-voting and Browns Investments. 

The Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments), whilst the sector index decreased by 0.54%. The share price of Browns Investments lost 20 cents (1.39%), closing at Rs. 14.20. SMB Leasing, Lanka IOC and Lanka Orix Finance were also included amongst the top turnover contributors. The share price of SMB Leasing moved up by 40 cents (33.33%) to close at Rs. 1.60. The share price of Lanka IOC recorded a gain of Rs. 5.40 (15.52%) to close at Rs. 40.20. The share price of Lanka Orix Finance declined by Rs. 2.90 (12.29%) to close at Rs. 20.70.