Stock market rebounds as investor sentiment improves

• Expolanka momentum continues up Rs. 8.50 to Rs. 314.25, with market cap well over Rs. 610 b
• LOLC Group stocks back in demand

The Colombo stock market bounced back yesterday as investor sentiment improved, though turnover was relatively low in comparison to recent highs.

The All Share Price Index gained by 1.4%, or 157 points, and the S&PSL20 improved by 0.9%, or 36 points. Turnover amounted to Rs. 5.5 billion involving 490.5 million shares.

Asia Securities said that following a subdued opening, the ASPI surged in the second half of the session as volatile stocks CLC and LOLC trimmed down some of the sharp losses extended in the last couple of sessions, while the more liquid S&PSL20 resumed its record-breaking run on the back of price gains in EXPO (+2.8%), TKYO (+6.8%) and TKYOX (+6.8%). 

Notably, poultry related stocks such as BFL and TAFL witnessed higher activity during the session and ended recording significant gains at 12.2% and 12.7% respectively. Turnover was supported by retail and HNI activity in EXPO, BIL and LOFC. The breadth of the market was strong with 129 gainers and 83 decliners. Expolanka finished at Rs. 314.25, up by Rs. 8.50 and its market capitalisation moved beyond the Rs. 600 billion milestone to Rs. 611 billion. 

Asia said foreigners recorded a net outflow of Rs. 10 million, while their participation increased to 2.7% of turnover (previous day 1.5%). Net foreign buying topped in TKYO.N at Rs. 87 million and net selling topped in TAFL.N at Rs. 65.6 million. 

First Capital said the bourse thrived back into the green territory while closing at a one-and-a-half-week-high gain of 157 points despite low turnover. 

“The Index displayed a slight drop and traded in the red zone for the first hour of the session. Eventually, as investors were brimming with confidence, the market displayed a gradual uptrend till the end while hitting an intraday high of 11,207 before closing at 11,178, gaining 157 points,” First Capital said, adding that CLC and LOFC counters contributed significantly to the ASPI hike. Turnover was led by a joint contribution of 40% from the Diversified Financials sector and the Food, Beverage and Tobacco sector. 

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Renuka Hotels and Ceylon Hospitals. Mixed interest was observed in Expolanka Holdings, Lanka Orix Finance and Commercial Leasing & Finance, whilst retail interest was noted in SMB Leasing voting and nonvoting, and Browns Investments. 

Diversified Financials sector was the top contributor to the market turnover (due to Lanka Orix Finance and Commercial Leasing & Finance), whilst the sector index gained 3.48%. The share price of Lanka Orix Finance moved up by Rs. 3.20 (15.46%) to close at Rs. 23.90. The share price of Commercial Leasing & Finance recorded a gain of Rs. 3.20 (11.03%) to close at Rs. 32.20.

The Food, Beverage and Tobacco sector was the second-highest contributor to the market turnover (due to Browns Investments), whilst the sector index increased by 0.54%. The share price of Browns Investments closed flat at Rs. 14.20.

Expolanka Holdings and John Keells Holdings were also included amongst the top turnover contributors. The share price of Expolanka Holdings increased by Rs. 8.50 (2.80%) to close at Rs. 312.50. The share price of John Keells Holdings appreciated by Rs. 0.25 (0.17%) to close at Rs. 145.25.