Bulls return to Colombo stock market with new vigour

The Colombo stock market yesterday produced its most convincing performance in recent months with both indices gaining sharply on high turnover reflecting improved investor sentiment. 

The active S&P SL20 gained by 2.3% and the benchmark All Share Price Index improved by 1.8%. Turnover was Rs. 2.38 billion involving 93.4 million shares. 

Asia Securities said following several weeks of moderate buying, the market witnessed buoyant momentum on Tuesday as retail and HNI investors stepped up buying, targeting deep discounted stocks across sectors. 

The indices trended upwards throughout the session mainly on the back of sharp gains in LIOC (+11.6%) while EXPO (+4%), HAYL (+4.8%), and LOLC (+4%) contributed significantly to the index on renewed retail and HNI buying. 

The ASPI opened trading with a sharp gap-up of 78 points, breaching the 7,800 level and subsequently crossed the 7,900 mark to settle at 7,908 (+139 points). LIOC came in the biggest contributor to the index (+13 points), followed by EXPO (+12 points), HAYL (+10 points) and SPEN (+9 points). Turnover surpassed Rs. 2 billion, for the first time in two months, led by LIOC (Rs. 583 million), MELS (Rs. 210 million), EXPO (Rs. 185 million), and ACL (Rs. 159 million). The breadth of the market ended strong with 134 price gainers outnumbering 62 decliners.

Asia also said foreigners recorded a net outflow of Rs. 16 million while their participation increased to 9.7% of turnover (previous day 1.9%). Net foreign buying topped in ASIY at Rs. 7.8 million while net foreign selling topped in WIND at Rs. 16 million. 

First Capital said the bourse rallied for the fourth straight day, while recording the highest turnover in two and half months as investor sentiment improved with the announcement of the confirmation on the timeline of IMF staff level agreement stated by the President. 

Moreover, results reported by the announced dollar earnings and plantation counters also fuelled investor confidence. In response to that, index started off on a solid footing and maintained its steep upward trajectory throughout the session and closed for the day at a two-months high of 7,908, gaining 139 points. 

Turnover was recorded at a healthy level of Rs. 2.4 billion (+127% cf. monthly average turnover of Rs. 1 billion) supported by high retail participation in LIOC after the price of Auto Diesel was revised down marginally whilst petrol prices were kept unchanged. Energy and Food, Beverage and Tobacco sectors dominated turnover accounting for a joint contribution of 47%. 

NDB Securities said high net worth and institutional investor participation was noted in Melstacorp, John Keells Holdings and Hatton National Bank. Mixed interest was observed in Lanka IOC, Expolanka Holdings and ACL Cables whilst retail interest was noted in Browns Investments, LOLC Finance and Waskaduwa Beach Resort. 

Energy sector was the top contributor to the market turnover (due to Lanka IOC) whilst the sector index gained 9.47%. The share price of Lanka IOC increased by Rs. 10.40 (11.65%) to close at Rs. 99.70.

The Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (due to Melstacorp) whilst the sector index increased by 0.56%. The share price of Melstacorp gained 70 cents (1.74%) to close at Rs. 41.

Expolanka Holdings, ACL Cables and John Keells Holdings were also included amongst the top turnover contributors. The share price of Expolanka Holdings moved up by Rs. 6.75 (4.02%) to close at Rs. 174.75. The share price of ACL Cables recorded a gain of Rs. 4.50 (12.03%) to close at Rs. 41.90. The share price of John Keells Holdings declined by 25 cents to close at Rs. 119.50.