No cheer at CSE over IMF deal as indices dip by 1%

• Analysts claim investors had factored in IMF deal in recent upward trend and yesterday’s dip was due to profit taking
• Others opine new info on the deal including $ 7 b overall financing and EFF extending budgetary support warranted better investor sentiment
• ASPI up by 500 points Staff Level Agreement reached on 1 Sept. 2022
• ASPI was up by 14% YTD and S&P SL by 8% until Monday
• On impending sale of State stakes SLT gains by Rs. 10.70/12.6% to Rs. 95.30 and Lanka Hospitals gain by Rs. 8.50/7.6% to Rs. 120

The Colombo stock market yesterday failed to show its jubilation on Sri Lanka securing the $ 3 billion lifeline from the IMF as both indices fell by 1% amidst low turnover. 

The active S&P SL20 declined by 1.8% and the benchmark ASPI by 1%. Turnover was Rs. 1.47 billion involving 79 million shares.

Some analysts said the market previously had already factored in the benefit of the IMF deal and yesterday’s dip wasn’t related. Others however insisted that given some of the new updates such as over $ 7 billion additional financing and EFF being opened up for budgetary support the investors could have been more optimistic.

Until yesterday the ASPI was up 14.26% YTD and S&P SL20 was up 8.2%.

Asia Securities said the indices closed in red on Tuesday as investors resorted to broad-based profit-booking following consecutive sessions of price increases. 

Front-line stocks EXPO (-4.6%), LOFC (-4.3%), LIOC (-3.0%), SAMP (-3.0%), BIL (-1.4%), and HAYL (-1.0%) closed lower while SLTL (+12.6%) continued its upward trend during the session. 

SLTL ended as the major index mover with 8 points while SAMP (-15 points), EXPO (-11 points), and VONE (-9 points) came in as the biggest laggards on the ASPI. The breadth of the market ended negative with 76 price gainers and 125 decliners. 

Turnover was led by SLTL (Rs. 237 million), BIL (Rs. 123 million), and EXPO (Rs. 120 million).

Asia also said foreigners recorded a net inflow of Rs. 22.4 million. Net foreign buying topped in LOLC at Rs. 18 million and selling topped in BIL.N at Rs. 14.3 million.

First Capital said despite the Government securing the 48-month IMF Extended Fund Facility of about $ 3.0 billion deal, the market surprisingly regressed to red during the day losing 96 points. 

The Bourse gained by over 500 points since the country reached the IMF staff-level agreement on 1 September 2022 and after securing the final deal on Monday, profit taking was witnessed mainly on bluechip companies. 

First Capital said although index started on an uptrend, a sideways moment was witnessed afterwards mainly on Banking sector counters on the back of rising concerns of the possible domestic debt restructuring. 

Turnover dipped as investors await for a clear direction on the macroeconomic front and interest rates movement ahead of the largest T-Bill auction which is scheduled for tomorrow. Meanwhile, SLTL, LHCL and ECL remained the top gainers as the treasury decided to divest major stakes of those companies in order to raise funds for the government. 

NDB Securities said high net worth and institutional investor participation was noted in Distilleries. Mixed interest was observed in Sri Lanka Telecom, Expolanka Holdings and Hayleys whilst retail interest was noted in Browns Investments, SMB Leasing nonvoting and LOLC Finance. 

The Food, Beverage & Tobacco sector was the top contributor to the market turnover (due to Browns Investments and Distilleries) whilst the sector index lost 0.18%. The share price of Browns Investments lost 10 cents to Rs. 6.80. The share price of Distilleries recorded a gain of 30 cents to Rs. 20.70.

The Telecommunication Services sector was the second highest contributor to the market turnover (due to Sri Lanka Telecom) whilst the sector index increased by 6.15%. The share price of Sri Lanka Telecom increased by Rs. 10.70 (12.65%) to Rs. 95.30.

Expolanka Holdings and Hayleys were also included among the top turnover contributors. The share price of Expolanka Holdings moved down by Rs. 6.50 (4.56%) to Rs. 136.00. The share price of Hayleys declined by 80 cents to close at Rs. 80.20.