Bourse bust: Rs. 86 b in value wiped off again, Rs. 150 b since Friday

• Some analysts decry unwarranted knee-jerk reaction by investor community over global and internal COVID-19 shock

The Colombo stock market yesterday saw a further Rs. 86 billion in value wiped off, bringing the total to a staggering Rs. 150 billion since last Friday as investors reacted negatively to the impact of COVID-19 pandemic largely, globally whilst domestic factors weren’t very inspiring.  

The S&P SL20 Index crashed by 5% in early trading, second instance in the week, prompting a market halt.  By end of trading, the ASPI decreased by 3.55% or 184.97 points to close at 5,019.55, lowest in near 8 years. ASPI hit an intra-day low of 5,009. It is down 18.1% so far this year.  

The S&P SL20 Index decreased by 4.66% or 112.11 points. Market capitalisation yesterday was Rs. 2.33 trillion, down from Rs. 2.41 trillion on Wednesday and Rs. 2.48 trillion on Friday.  

The investor reaction was owing to global reaction to the COVID-19 pandemic especially in the US and Europe though most markets recovered yesterday. This prompted some analysts to allege that local investors were displaying an unwarranted knee-jerk reaction. Turnover increased by 19.9% relative to Wednesday to amount to Rs. 514 million while the turnover of Sampath bank accounted for 21.5%.

Foreign investors recorded a net outflow of Rs. 6.2 million compared to a net inflow of Rs. 26.3 million on Wednesday. NDB Securities said the ASPI closed in red as a result of price losses in counters such as John Keells Holdings, Browns Investments and Sri Lanka Telecom.

High net worth and institutional investor participation was noted in Distilleries and Ceylinco Insurance. Mixed interest was observed in Sampath Bank and John Keells Holdings whilst retail interest was noted in Browns Investments and Access Engineering. Foreign participation in the market activity remained at subdued levels with foreigners closing as netsellers.

Banks sector was the top contributor to the market turnover (due to Sampath Bank and Commercial Bank) whilst the sector index lost 4.72%. The share price of Sampath Bank decreased by Rs 7.00 (4.76%) to close at Rs 140.00. The share price of Commercial Bank moved down by Rs 3.00 (3.85%) to close at Rs 75.00. 

Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index decreased by 4.78%. The share price of John Keells Holdings lost Rs 4.70 (3.46%) to close at Rs 131.30.

Distilleries and Ceylinco Insurance were also included amongst the top turnover contributors. The share price of Distilleries recorded a loss of Rs 0.90 (5.81%) to close at Rs 14.60. The share price of Ceylinco Insurance declined by Rs 207.20 (10.52%) to close at Rs 1,762.80.