Stock market gathers momentum; better corporate earnings helpful

The Colombo stock market gathered further momentum yesterday, with indices up amidst healthy turnover, whilst better than expected corporate earnings being reported have given more confidence. 

Acuity Stockbrokers said the Bourse ended on a positive note as the ASPI increased by 0.29% or 15.04 points to close at 5,235.61 points, while the S&P SL20 Index also increased by 0.87% or 19.92 points to close at 2,297.12.

Turnover decreased by 29.4% relative to yesterday to Rs. 1.92 billion, while the crossings for the day amounted to 14.3% of the total day’s turnover. 

First Capital said following the tracks of HNWIs, retailers played the market with buoyancy stemming from the better than expected earnings, which sustained the drive in the green zone for the third consecutive session. 

It said the index experienced a spike within the first few minutes of trading due to the buying interest in selected blue-chip counters, and thereafter experienced a gradual downtrend till mid-day. During the latter part of the day, the market recorded a slight recovery and a sideways movement before closing at 5,236 with an advance of 15 points. 

Turnover was ruled by the Banking and Capital Goods counters contributing 79%, led by John Keells Holdings and Commercial Bank. 

“Foreign investors continued to be on the selling side while demonstrating a cautious attitude for almost one month,” First Capital added.

Net foreign outflow was lower at Rs. 57 million as against Rs. 570 million on Wednesday.

NDB Securities said the ASPI closed in green as a result of price gains in counters such as Commercial Bank, Ceylinco Insurance and Hayleys.

High net worth and institutional investor participation was noted in Commercial Bank and John Keells Holdings. Mixed interest was observed in Sampath Bank and Hatton National Bank whilst retail interest was noted in DFCC Bank. 

The Banking sector was the top contributor to the market turnover (due to Commercial Bank, DFCC Bank, Hatton National Bank and Sampath Bank), whilst the sector index gained 1.48%. The share price of Commercial Bank gained Rs. 2.40 (2.96%) to close at Rs. 83.40 while the share price of DFCC Bank moved up by Rs. 1.70 (2.84%) closing at Rs. 61.50 whilst foreign holdings decreased by 3,535,725 shares. Furthermore, the share price of Hatton National Bank recorded a gain of Rs. 2.30 (1.95%) to close at Rs. 120.00 while the share price of Sampath Bank appreciated by Rs. 1.50 (1.18%) to close at Rs. 129.00.

Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index increased by 0.67%. The share price of John Keells Holdings increased by Rs. 0.30 (0.25%) to close at Rs. 119.50. 

Ceylon Cold Stores announced an interim dividend of Rs. 8.50 per share whilst Asia Siyaka Commodities announced their first and final dividend of Rs. 0.05 per share. Furthermore, Convenience Foods announced a final dividend of Rs. 5.50 per share.