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It was all green yesterday at the display in the electronic board of the Colombo Stock Exchange at the close of trading as investors turned extremely bullish following the conclusion of economy and equities-positive domestic debt optimisation - Pic by Lasantha Kumara
The Colombo stock market yesterday had its best ever performance in many years thanks to investors turning extremely bullish following a re-rating of listed equities returns and positives of Domestic Debt Optimisation (DDO). Several Records were broken as investors turned jubilant over the Government’s DDO and its positive impact on equities and the economy. The benchmark ASPI rose 6.7% or over 633 points thereby crossing the 10,000points mark whilst the active S&P SL20 shot up by 10% or 279 points.
Turnover was a massive Rs. 7.5 billion, half of the turnover in the whole of May. Number of shares traded was 335.6 million, nearly half of shares traded in the entirety of May. Market capitalisation jumped by a massive Rs. 227 billion to push the year-to-date figure to Rs. 4.12 trillion from Rs. 3.9 trillion last week reflecting a 7.3% YTD increase.
Most optimistic f the investors were baffled by the CSE’s performance yesterday whilst some felt it was amateurish since post-DDO the country has many challenges. The DDO encompassing Rs. 750 billion of domestic debt was approved by the Parliament on Saturday. Though the Opposition breathed fire against inequality and economic injustice following the Government excluding banks and private bond holders and victimising the workers superannuation funds under its treatment of domestic debt. Nevertheless, the banking sector was the top contributor to the market’s upswing as it was spared by a previously more dreaded DDO. Banking Sector contributed most to the turnover apart from the sector index gaining by over15%. Asia Securities said following a five-day hiatus, the market began trading on Tuesday with a “remarkable start” as investors snap up stocks in the banking sector driven by the positive outlook resulting from the proposed DDO, which indicated minimal impact on both the banking sector and the broader economy.
With the uncertainty surrounding the DDO now resolved, investors’ confidence was further boosted leading to a broad-based upturn and strong gains in index-heavy stocks. Asia said the indices achieved their largest intraday gains in over a year, with the ASPI surging by 634 points.
The banking sector index (+15.4%) witnessed the largest upswing during the session, followed by diversified financials (+10.1%), and transportation (+8.1%). Notable price gains were recorded by COMBX (+24.4%), COMBN (+18.8%), NTBN (+14.6%), SAMP (+14.5%), HNBX (+14.6%), HNBN (+13.1%), NDBN (+14.8%), DFCC (+15.7%), PABC (+15.5%), SEYBX (+20.7%) and SEYBN (+11.1%) while front-line stocks BIL (+12.1%), LOFC (+13.0%), CFVF (+20.8%), and CALT (+24.8%) also scaled significant gains during the session.
COMBN (+97 points), SAMP (+71 points), and HNBN (+54 points) came in the major index movers for the day. Turnover was led by COMBN (Rs. 880 million), JKH (Rs. 813 million), MELS (Rs. 486 million), and BIL (Rs. 434 million) leading the way. Crossings accounted for 21.5% of turnover led by JKH (Rs. 714.2 million), MELS (Rs. 349.4 million) and COMBN (Rs. 245.5 million). It was not only the locals who were bullish but foreigners too. The CSE saw a net foreign inflow of Rs. 629 million boosting the year-to-date figure to Rs. 1.7 billion. Net foreign buying topped in JKH at Rs. 317.2 million and net selling topped in CINS.X at Rs. 23 million.
First Capital said the Bourse closed on an exceptionally buoyant note as the ASPI gained over 600 points while market turnover hit a17-month high. “The Index moved on a steady upward trajectory throughout the day as investors turned bullish following the DDO announcement. As investors gained clarity on the DDO clearance and with the banking sector being exempted from the DDO, COMB, SAMP and HNB gained sharply during the day. Accordingly, COMB, SAMP and HNB were also amongst the top contributors to the ASPI amidst heavy buying on the counters,” First Capital said.
In addition to banking sector counters, Treasury counters and NBFIs too enticed buying interest from investors. NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Melstacorp and Commercial Bank. Mixed interest was observed in Sampath Bank, Nations Trust Bank and Hayleys whilst retail interest was noted in Browns Investments, HNB Finance voting & nonvoting and LOLC Finance.
Banking sector was the top contributor to the market turnover (due to Commercial Bank and Nations Trust Bank) whilst the sector index gained 15.42%. The share price of Commercial Bank increased by Rs. 12.80 to Rs. 80.90. The share price of Nations Trust Bank appreciated by Rs. 10.30 to Rs. 81.The Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index increased by 4.75%. The share price of John Keells Holdings gained Rs. 5.50 to close at Rs. 155.50.
Melstacorp and Browns Investments were also included among the top turnover contributors. The share price of Melstacorp moved up by Rs. 4.90 to Rs. 63.40. The share price of Browns Investments recorded a gain of 70 cents (12.07%) to Rs 6.50. Separately Carson Cumberbatch announced its interim dividend of Rs. 2.10 per share.
