Stock market rebounds to 2-month high but YTD net foreign outflow tops Rs. 26 b mark

The Colombo stock market showed its most emphatic recovery yesterday with higher gains by the indices on improved turnover. 

The All Share Price Index gained by 0.5% or 37 points, but the more active S&P SL20 shot up by 1% or 31 points. Turnover was Rs. 3.22 billion involving 141 million shares. 

However, the negative development was the year-to-date (YTD) net foreign outflow crossing the Rs. 26 billion mark after net foreign selling shot up yesterday to Rs. 546 million. 

On Wednesday, there was a welcome yet modest net inflow of Rs. 21 million. With yesterday’s sell off, YTD net foreign outflow stood at Rs. 26.3 billion. 

First Capital said the Bourse sustained its positive drive for the second straight day by continuing to reside in the green, while recording an index high of nearly two months. 

“ASPI surged within the first few minutes and, thereafter experienced a gradual upward trajectory over the first hour of trading reaching an intraday high of 7,621. Later, the market shifted to a sideways movement for the rest of the session while closing at 7,601, gaining 37 points,” First Capital said. 

It said the turnover was led by the Banking sector followed by the Materials sector with a joint contribution of 50%. Parcel trades accounted for 25% of the turnover. 

Asia Securities said the indices extended gains throughout the session with the ASPI surpassing the 7,600 mark, pushed by price gains in index-heavy counters such as LOLC, RCL and HNBX. 

Turnover topped in HNBX, dominated by crossings which accounted for 84.0% of stock turnover while overall activity was recorded at stronger levels, driven by HNI and retail activity. 

Banks, Materials, Capital Goods and Diversified Financials sectors led activity, collectively accounting for 75.9% of turnover. 

Foreigners recorded a net outflow of Rs. 546.2 million while their participation increased to 13.4% of turnover (previous day 4.6%). Estimated net foreign buying topped in CARG at Rs. 85.4 million and net foreign selling topped in HNB.X at Rs. 621 million.

NDB Securities said indices closed in green as a result of price gains in counters such as LOLC Holdings, Hemas Holdings and Distilleries.

It said high net worth and institutional investor participation was noted in Hatton National Bank (HNB) non-voting, Cargills and Panasian Power. Mixed interest was observed in Prime Lands Residencies, Royal Ceramics and Dipped Products, whilst retail interest was noted in SMB Leasing, Alumex and Softlogic Capital. 

The Banking sector was the top contributor to the market turnover (due to HNB non-voting), whilst the sector index gained 0.97%. The share price of HNB non-voting increased by Rs. 5.25 (5.01%), closing at Rs. 110, whilst foreign holdings decreased by 5,645,361 shares.

The Materials sector was the second highest contributor to the market turnover (due to Alumex), whilst the sector index increased by 1.04%. The share price of Alumex moved up by Rs. 0.20 (1.44%) to close at Rs. 14.10.

Royal Ceramics, LOLC Holdings and Prime Lands Residencies were also included amongst the top turnover contributors. The share price of Royal Ceramics gained Rs. 1.20 (3.18%) to close at Rs. 38.90. The share price of LOLC Holdings recorded a gain of Rs. 3.50 (0.93%) to close at Rs. 379.50. The share price of Prime Lands Residencies declined by Rs. 0.40 (3.51%) to close at Rs. 11.

Separately, Singer Finance announced an interim dividend of Rs. 0.80 per share, whilst Janashakthi Insurance Company announced a final dividend of Rs. 2 per share.