No stock market cheer for RW’s good news

The Colombo stock market yesterday appeared unfazed by much trumpeted good news from the President Ranil Wickremesinghe-led Government over external debt breakthrough as it ended negatively with low activity.

The active S&P SL20 was down by 0.75% and the benchmark ASPI by 0.6%. Turnover was a low Rs. 1 billion involving 41 million shares. Foreigners were also net sellers.

Pro-Government analysts were disappointed with the lack of cheer from investors to the deal on $ 10 billion debt held by bilateral creditors whilst others opined that the market had previously factored a June breakthrough though Wickremesinghe endeavoured to garner widest political mileage with pre and post marketing blitz. Independent analysts pinned yesterday’s bearish behaviour for investors wanting a clearer outlook on Presidential stakes.

Asia Securities said the market stayed muted as investors took a cautious approach following the President’s announcement of the bilateral debt creditors’ agreement. Sectorally, banking stocks declined during the session as the market awaited further developments in the private creditors’ negotiations. Nevertheless, COCR saw a pick-up in buying interest driven by the company’s stronger-than-expected dividend announcement. The stock recorded a sharp price gain of 5.0% in an otherwise tepid session. Following a brief gap-up opening, the ASPI trended downwards mainly due to price declines in SUN (-0.9%), SAMP (-0.6%), NTBN (-1.1%), DIPD (-0.5%), CFIN (-2.9%), and NDB (-1.1%). SUN (Rs. 103 million) topped the turnover list, followed by COCR (Rs. 92 million), and HAYL (Rs. 56 million). JKH (-7 points), COMB (-6 points) and LION (-6 points) came in as the major draggers during the session.

Turnover declined to a three-week low at Rs. 1 billion due to low levels of HNI and institutional activity.

Foreigners also recorded a net outflow of Rs. 24.2 million. Net foreign buying topped in COOP at Rs. 17.3 million and foreign selling topped in SAMP.N at Rs. 43.3 million.

First Capital said the signing of the MOUs with the bilateral creditors for a debt deal worth $ 10 billion failed to uplift the mood of the CSE, as both indexes dipped and closed in red. Despite the sluggish activities in the market, consumer and energy sector counters attracted slight buying interest, contrasting with the negative impact exerted by heavy weights including HNB, JKH and LOLC. Accordingly, ASPI closed at 12,189, losing 72 points and reaching its lowest level in over three weeks. Notably, investors showed significant buying interest for COCR following Wednesday’s dividend announcement.

Turnover reached to over a 3-week low and 38.7% down from month’s average whereas the banking sector led the turnover with a contribution of 20.1%, followed by the Food, Beverage and Tobacco and Diversified Financials sectors jointly contributing to 35.4% of overall turnover.

NDB Securities said high net worth and institutional investor participation were noted in Sampath Bank, Windforce and Hatton National Bank nonvoting. Mixed interest was observed in Sunshine Holdings, Commercial Credit and Finance and Hayleys whilst retail interest was noted in Co-Operative Insurance Company, Browns Investments and LOLC Finance.

The Banking sector was the top contributor to the market turnover (Sampath Bank) whilst the sector index lost 0.84%. The share price of Sampath Bank moved down by 50 cents to Rs. 78.90.

The Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (Sunshine Holdings) whilst the sector index decreased by 0.82%. The share price of Sunshine Holdings decreased by 60 cents to Rs. 63.90.

Commercial Credit and Finance, Hayleys and Windforce were also included amongst the top turnover contributors. The share price of Commercial Credit and Finance gained Rs. 1.90 to Rs. 37.70. The share price of Hayleys recorded a loss of one Rupee to Rs. 105.50. The share price of Windforce Ltd. appreciated by 30 cents to Rs. 19.80.