An apparent sense of indifference by local investors despite breakthrough in restructuring of $ 12.5 billion International Sovereign Bonds (ISBs) saw the Colombo bourse dip yesterday whilst seemingly bullish foreign investors stepped up their buying.

The benchmark ASPI declined 111 points (0.9%) and the active S&P SL20 index was down 38 points (1.1%). Turnover was Rs. 1.96 billion involving 59.8 million shares.

The market saw net foreign buying of Rs. 972.4 million mainly on JKH yesterday boosting the net foreign inflow to Rs. 2.1 billion in just four days of July. 

Asia Securities said the ASPI commenced the session with a gap-up of 66 points, however trended downwards thereupon as investors adopted a “wait-and-see” approach following the Government’s announcement of the completion of negotiations with restricted members of the Ad Hoc Group of Bondholders to restructure the ISBs.

Sectorally, downward price movements in banking counters triggered a broad-based selling during the session. SAMP (-1.3%), NTBN (-3.6%), PABC (-1.4%), NDB (-1.6%), DFCC (-1.0%), and COMBN (-0.5%) recorded price losses during the session. Moreover, DIPD (-3.0%), BIL (-1.7%), RCL (-1.2%), LIOC (-1.0%), LOLC (-3.5%), and VONE (-2.8%) ended in the red. LOLC (-11 points), MELS (-9 points), and SAMP (-8 points) ended as the biggest laggards for the day.

However, foreigners remained on the buying side for the fourth consecutive session driven by JKH (Rs. 634 million) and SAMP (Rs. 321 million). Notably, foreigners have generated a net foreign inflow of Rs. 2.1 billion over the last four sessions. Turnover was led by JKH (Rs. 679 million), SAMP (Rs. 364 million), and HNBN (Rs. 103 million).

First Capital said the investor confidence on ISB restructuring waned, creating a negative pressure on the buying sentiment of investors in the morning hours and eventually triggered panic selling among investors as both indices closed the day in red with ASPI falling to over a two-month low by 111 points to halt the day at 11,927. However, increased participation of retail investors was observed compared to previous sessions, while participation of foreign investors and HNWIs remained unchanged. Furthermore, most of the sectors witnessed a price decline during the day. Conglomerates and banking sector counters exerted significant negative pressure whereas LOLC, MELS, SAMP, CTC and NTB emerged as the major negative contributors.

NDB Securities said crossings were witnessed in John Keells Holdings, Sampath Bank and Hatton National Bank accounting for 45.0% of the turnover. Mixed interest was observed in Hayleys, Nations Trust Bank and Dipped Products whilst retail interest was noted in UB Finance Company, SMB Leasing and Browns Investments.

The capital goods sector was the top contributor to the market turnover (due to John Keells Holdings and Hayleys) whilst the sector index lost 0.49%. The share price of John Keells Holdings closed flat at Rs. 203.50. The share price of Hayleys recorded a loss of 75 cents to Rs. 101.25.

The Banking sector was the second highest contributor to the market turnover (due to Sampath Bank, Hatton National Bank and Commercial Bank) whilst the sector index decreased by 0.97%. The share price of Sampath Bank lost one Rupee to Rs. 78. The share price of Hatton National Bank moved down by 25 cents to Rs. 199.50. The share price of Commercial Bank declined by 50 cents to Rs. 103.50.

SL secures “fair”  and “favourable” deal on $ 12.5 b ISBs