Winning week at Colombo stock market but suffers Rs. 1 b net foreign outflow

The Colombo stock market bounced back this week to close on the up having suffered negative closings in the previous two weeks.

The benchmark ASPI this week gained 467.51 points (5.28%) and the active S&P SL20 improved by 120.71 points (4.45%), ending two weeks of losses previously. Last week the two indices declined by over 1% whilst prior week saw a sharp dip of 2.62% (ASPI) and 3.7% (S&PSL20).

Daily turnover this week averaged Rs. 2 billion, improving from Rs. 1.7 billion previously.

Commenting on Friday’s performance, Asia Securities said following a sharp 100-point gap-up opening, the ASPI moved downwards in early hours dragged by price losses in SLTL (-1.0%), EXPO (-1.0%), AAIC (-4.0%), SCAP (-4.0%), LOLC (-1.8%), and BIL (-3.2%).

However, the index resumed its upward trend towards the end of the session and managed to close with a gain of 60 points (+0.7%) supported by price increases in RCL (+3.7%), HAYL (+1.7%), NTB (+1.4%), SAMP (+2.2%), SUN (+5.3%), MELS (+2.4%), MGT (+4.1%), ALUM (+7.0%), and COMB (+1.7%). The breadth of the market was positive with 112 price gainers and 64 decliners.

Turnover improved to Rs. 2.1 billion led by RCL (Rs. 243 million), LIOC (Rs. 231 million), HHL (Rs. 230 million), and HAYL (Rs. 164 million) on the back of sizeable block trades executed during the session. Off-board transactions accounted for 26.7% of turnover, led by HHL (Rs. 155.6 million), LIOC (Rs. 153.8 million), and RCL (Rs. 150.0 million).

A net foreign outflow of Rs. 220 million was recorded for the day led by net selling HHL (Rs. 220 million). Sunshine Holdings topped net foreign buying with Rs. 38.3 million.

First Capital said the bourse settled firmly in the green trading positively throughout the week while recording a fresh index high after October 2022 (nearly 4 ½-month) on the back of the possible signing of the IMF board level agreement by the end of March 2023.

Accordingly, the index started on a solid footing and remained firmly in the green throughout the session as High net worth and Institutional investors’ participation continued on Blue chip companies and index heavyweights. Despite a slowdown post mid-day, the market managed to end the week positively at 9,316, gaining 60 points.

Moreover, turnover recovered to Rs. 2.1 billion (+14% cf. monthly average turnover of Rs. 1.9 billion) amidst the improved investor activities and multiple off-board transactions on HHL, LIOC, RCL and banks which contributed 27% to the market turnover. Accordingly, the Capital Goods sector led the turnover with 38% contribution followed by the Banking sector (14%). Foreign participation remained volatile during the week recording a net foreign outflow of Rs. 1.0 billion.

NDB Securities said on Friday High net worth and institutional investor participation was noted in Hemas Holdings, Lanka IOC, and Royal Ceramics. Mixed interest was observed in Hayleys, Nations Trust Bank and Sampath Bank whilst retail interest was noted in Alumex, Prime Lands Residencies and Browns Investments.

The Capital Goods sector was the top contributor to the market turnover (due to Royal Ceramics, Hemas Holdings and Hayleys) whilst the sector index gained 0.40%. The share price of Royal Ceramics increased by Rs. 1.10 (3.74%) to Rs. 30.50. The share price of Hemas Holdings moved up by 60 cents to Rs. 64.60. The share price of Hayleys recorded a gain of Rs. 1.30 (1.69%) to Rs. 78.20.

The Banking sector was the second highest contributor to the market turnover (due to Nations Trust Bank) whilst the sector index increased by 1.53%. The share price of Nations Trust Bank appreciated by 90 cents to Rs. 66. Lanka IOC was also included among the top turnover contributors with share price losing Rs. 1.50 to Rs. 198.50.