Bourse in welcome rebound; market cap up by Rs. 25 b

Ending a miserable run, the Colombo stock market bounced back yesterday, with its value gaining by Rs. 25 billion, though some analysts claimed investors behaved with less conviction, judging by low turnover.

The All Share Index rose by 1% and the MPI by 0.7%, collectively helping the market capitalisation to reduce the loss in value since 3 November to Rs. 125 billion from Rs. 150 billion as of Wednesday. The rebound also prevented the ASI from hitting below the psychological 6,000 point level and the year to date negative return surpassing the 10% mark.

Turnover was Rs. 827 million, up from Rs. 590 million.

Some analysts said that most of the stocks that gained were penny or speculative ones, though some of the index heavy counters improved as well. “Return of buying is positive, but at the same time selling pressure remains,” they added.

“Interest on a number of speculative counters like HVA Foods and Blue Diamond was revived, while the index heavy John Keells Holdings and Commercial Bank helped lift the turnover levels as the bargain hunters collected the stocks,” NDB Stockbrokers said.

The Diversified sector was the biggest contributor to the market turnover (due to John Keells Holdings) and the sector index increased 0.85%. The share price of JKH decreased a further Rs. 2.80 (1.58%) to close at Rs. 175. A crossing of 426,206 shares of John Keells took place at a price of Rs. 175.

The Bank, Finance and Insurance sector also contributed to the market turnover (due to Commercial Bank) and the sector index increased by 1.52%. Share price of COMB moved up by Rs. 2.90 (2.90%) to close at Rs. 103.

HVA Foods’ share price increased Rs. 1.10 (2.81%) to close at Rs. 40.30 while Blue Diamond voting share increased Rs. 0.80 (11.5%) to close at Rs. 7.80 and non voting share increased Rs. 0.50 (16.6%) to close at Rs. 3.60.

Arrenga Capital said ASI was seen escalating as much as 90.7 points by 11:11 a.m. yesterday, but stagnated to close at 6,092.56 points after mid-day.

“This rebound, after eight sessions of solid losses, assisted a few of the penny counters to write off previous dips, whilst the value investors who accumulated on the steady lot enjoyed their rising portfolio. With the slowing of the margin calls, investors regained some hope with gains despite the thin volume trades,” it added.

Lanka Securities said a notable level of retail activity was witnessed in the market where counters such as Blue Diamonds voting-nonvoting, PC House Plc and Tess Agro Plc demonstrated aggressive trading.

Among the day’s gainers were People’s Finance warrants, which gained 19.05% to Rs. 15, Blue Diamonds nonvoting shares, which rose 16.67% to Rs. 3.50 and Huejay, which rose 14.35% to Rs.168.10. Property Development Plc rose 12.43% to Rs. 57 and Bimputh Lanka gained 11.93% to Rs. 44.10. Autodrome lost 7.57% to Rs. 855.