Stock market turns bullish with Rs. 52 b value gain

Signs of bullish sentiments, especially by retailers, were apparent yesterday as the Colombo stock market gained sharply the first day of trading since the shocking political developments late Friday. 

The market capitalisation saw a Rs. 52 billion increase as the All Share Index and the active S&P SL 20 index gained by 2% each whilst turnover crossed the Rs. 4 billion mark. 

Blue chips, led by JKH, dominated turnover with heavy foreign selling, and high net worth individuals and few corporates collecting quantities. Retailers were busy collecting stock which, until yesterday, had dipped in value. 

First Capital said yesterday’s gain was the highest in nearly four years and turnover was a six-month high.

“Investor sentiment has bounced back,” claimed a market analyst on the news of the appointment of Mahinda Rajapaksa as Prime Minister by President Maithripala Sirisena. However, incumbent Prime Minister Ranil Wickremesinghe continuing to be resolute that Sirisena’s move was unconstitutional has fuelled greater uncertainty, other analysts pointed out. 

Prior to yesterday’s gain, the ASI was down 8.4% and the S&P SL fell sharply by 18%.

JKH saw 21.1 million of its shares traded for nearly Rs. 3 billion with 19.6 million shares changing hands via six crossings. Whilst foreigners sold, speculation was that existing shareholders Captains and Melstacorp were on the buying side. The share price of John Keells Holdings increased by Rs. 1.80 (1.28%) closing at Rs. 141.90 whilst foreign holdings decreased by 20.05 million shares. The blue chip also announced an interim dividend of Rs. 2 per share. 

HNB saw 2.15 million of its shares trade for Rs. 447 million with foreign selling of 0.8 million shares. Nimal Perera had collected 1 million HNB shares as part of his trading portfolio. HNB gained Rs. 1.70 (0.82%) to close at Rs. 210.

Softlogic Holdings was third highest with a turnover of Rs. 309 million, but it was a crossing of 15.1 million shares involving a transfer between accounts of a foreign fund. 

These three stocks accounted for 83.7% of the turnover and total foreign sales accounted for 88.3% of the turnover.

For ASI’s gain, Distilleries, Commercial Bank and Hemas Holdings were the major contributors, according to CT CLSA Securities. 

Retailers betting on a construction rebound under Mahinda Rajapaksa triggered interest on Access Engineering, which saw 3 million of its shares trade for Rs. 48.6 million and the price closing at Rs. 15.70, up by Rs. 2 or 14.5%. Construction sector gained by 13%, according to Acuity Stockbrokers. 

NDB Securities said Chevron Lubricants was also included amongst the top turnover contributors. The share price of Chevron Lubricants appreciated by Rs. 2 (2.94%) to close at Rs. 70. It announced an interim dividend of Rs. 2 per share.