No ‘good news’ for locals in stock market; foreigners continue buying

The Colombo stock market yesterday remained bearish beginning a new week in the same sentiment it ended last week.

The active S&P SL20 fell by 1% and the benchmark ASPI by 0.9%. Last week ASPI lost 301.6 points (2.5%) and S&P SL20 lost 104.4 points (2.9%). Turnover yesterday was Rs. 657 million, up from a 7-month low of Rs. 472.5 million on Friday. Volume of shares traded was 32.7 million as against 21.5 million shares on Friday.

Despite the indifference on the part of local investors to so called “good news” promoted by the President Ranil Wickremesinghe-led Government including indication of politically strong SLPP support for him at upcoming election, foreigners remained bullish.

Foreigners recorded a net inflow of Rs. 173.8 million boosting the figure in July so far to Rs. 2.3 billion.

Asia Securities said the indices closed in red on Monday, dragged by price declines in heavyweight stocks LOFC (-5.0%), HAYL (-2.5%), LIOC (-2.3%), and DIAL (-2.1%). Banking sector stocks remained moderate with price losses in NDB (-2.2%), HNBN (-1.4%), NTBN (-1.4%), and SAMP (-0.4%). HNB (-9 points), HAYL (-7 points), CFIN (-6 points), and NDB (-6 points) led the decline in the ASPI during the session. The market breadth was neutral, with 81 price decliners and 80 gainers.

Turnover was supported by crossings in HHL (Rs. 122 million) and SAMP (LKR 47 million). Foreigners generated a net inflow of Rs. 174 million driven by HHL (Rs. 122 million) and SAMP (Rs. 103 million). VONE saw most foreign selling at Rs. 35.3 million.

First Capital said the bourse commenced the week closing in the red, pivoting from the positive territory in the previous session. It closed at 11,842, losing 106 points and reaching over a two-month low. The involvement of HNWIs was subdued compared to the previous sessions, whereas retail investors maintained their active participation. The index was majorly plagued by index-heavy weights and banking sector counters, dragging the index into a negative territory, while most of the sectors witnessed price declines across the board. The Capital Goods sector contributed 35.5% to the overall turnover, whilst the Banking and Food, Beverage and Tobacco sectors jointly contributed 36.8% to the overall turnover. 

NDB Securities said high net worth and institutional investor participation were noted in Hemas Holdings and Sampath Bank. Mixed interest was observed in Vallibel One, LOLC Finance and Dipped Products whilst retail interest was noted in Industrial Asphalts, Browns Investments and SMB Leasing. 

The Capital Goods sector was the top contributor to the market turnover (due to Hemas Holdings and Vallibel One) whilst the sector index lost 0.73%. The share price of Hemas Holdings increased by 90 cents to Rs. 81.40. The share price of Vallibel One moved down by 10 cents to Rs. 50.50.

The Banking sector was the second highest contributor to the market turnover (due to Sampath Bank) whilst the sector index decreased by 1.01%. The share price of Sampath Bank lost 30 cents to Rs. 77.90.

LOLC Finance and Dipped Products were also included amongst the top turnover contributors. The share price of LOLC Finance recorded a loss of 30 cents to Rs. 5.70. The share price of Dipped Products declined by 80 cents to Rs. 35.