Bourse blues continue

The Colombo bourse continued to languish with its confidence-less blues as both indices dipped amidst lacklustre activity.

It was the second consecutive day of negative sentiments despite the Government presenting a reasonable Budget sans drastic proposals. However a few sectoral issues as well as the overhang of the Revival Act continue to haunt the stock market. The year-to-date negative return at the Colombo bourse is 9% now.

“The lacklustre market activity continued as the investor confidence remains low. Buying interest on a number of fundamentally strong counters was witnessed, which helped lift market turnover. Both indices closed lower as investors try to minimise their losses prior to the year end,” NDB Stockbrokers said.

“It seems that the market is taking too long to shake off its previous artificial speculative run. Increasing profit in a stagnant/declining market has always been a challenge,” Arrenga Capital said.

However, DNH Financial said that contrary to popular belief, investing on the CSE has not been completely abandoned as pockets of investors appear to be adopting a highly selective approach in order to pick value in the market.

“While we concede with the fact that the majority of the investors have largely been sitting in the wings over the last few weeks in anticipation of a market trigger that would propel the market to the next level, heading deeper into the fourth quarter, we advise investors to seek blue chip stocks that are now trading at single digit multiples with a medium- to longer-term investment horizon,” DNH added.

Arrenga also said the Colombo bourse had now set a trend, whereby the market slides from its initial morning spike after struggling to keep with the early gain. The day did not see a lot of gainers with 101 losers, 46 remaining flat and 65 gainers.

The Banking, Insurance and Finance Sector was the top contributor to the turnover (due to DFCC Bank) and the sector index depreciated 0.19%. DFCC share price declined Rs. 2.30 (2.05%) and closed at Rs. 110.00.

The Diversified sector also contributed to the market turnover (due John Keells Holdings) and the sector index decreased by 0.30%. The JKH share price remained unchanged and closed at Rs. 175.

Dialog Axiata and Serendib Hotels helped lift market turnover. Dialog share price closed at Rs. 7.90 while the Serendib share price closed at Rs. 31.