CSE posts sharpest gains in recent weeks on PM news

The Colombo stock market achieved one of its sharpest day and weekly gains thanks to apparent improved investor sentiment on the appointment of Ranil Wickremesinghe as the Prime Minister.

The active S&P SL20 Index gained by 5.2% and the benchmark ASPI by 4.4%. Turnover improved to Rs. 2.18 billion involving 117.5 million shares.

Following six weeks of declines, the ASPI ended the week positive, gaining 670.93 points (+9.03%) over three sessions this week while the S&P SL20 gained 261.10 points (+10.87%).

Asia Securities said the indices maintained their sharp upward trajectory yesterday as retail and HNI investors continued to buy the dip amid a positive turnaround in overall risk sentiment in the market consequent to the appointment of the new Prime Minister.

The ASPI returned to the 8,000 level, recording its biggest single-day gain in three weeks (+344 points), boosted by EXPO (+12.6%), LOFC (+12.7%), BIL (+7.9%), VONE (+7.4%), HAYL (+5.0%), and LOLC (+6.7%).

Turnover was led by EXPO (Rs. 920 million), BIL (Rs. 161 million), and LOFC (Rs. 140 million). Following a sharp gap-up of 253 points, the ASPI continued momentum to reach an intra-day high of 8,165 (+410 points) in the first hour of trading. Thereupon, the index witnessed stabilisation and ended the session at 8,098 (+344 points) while the more liquid S&P SL20 index closed at 2,662 (+132 points). The breadth of the market remained strong with gainers surpassing decliners 193 to 19.

Asia also said foreigners recorded a net inflow of Rs. 9.2 million while their participation declined to 2.3% of turnover (previous day 3.9%). Net foreign buying topped in CARG at Rs. 14.1 million and selling topped in RCL at Rs. 4.6 million.

First Capital said the appointment of the new Prime Minister led to a massive rally in the Colombo bourse, with the index crossing the 8,000 reaching a 1-Month high amidst renewed investor confidence on expectation of political stability. Moreover, revitalised by the new found investor confidence, market turnover bounced back up and recorded a two-week high.

Keeping up with the previous trend, the transportation sector led the daily turnover with a contribution of 42% whilst Food and Beverage had the next best contribution of 14%.

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings. Mixed interest was observed in Expolanka Holdings, Hayleys and LOLC Holdings, whilst retail interest was noted in Browns Investments, LOLC Finance and SMB Leasing voting and nonvoting.

Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings), whilst the sector index gained 12.60%. The share price of Expolanka Holdings increased by Rs. 21.75 (12.61%) to close at Rs. 194.25.

Food, Beverage & Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments), whilst the sector index increased by 3.52%. The share price of Browns Investments gained 50 cents (7.94%) to close at Rs. 6.80. LOLC Finance, Hayleys and LOLC Holdings were also included amongst the top turnover contributors. The share price of LOLC Finance moved up by 90 cents (12.68%) to close at Rs. 8. The share price of Hayleys recorded a gain of Rs. 3.50 (5.01%) to close at Rs. 73.30. The share price of LOLC Holdings appreciated by Rs. 31.25 (6.70%) to close at Rs. 497.50.

Separately Lion Brewery announced an interim dividend of Rs. 17.25 per share. Talawakelle Tea Estates and Singer Sri Lanka announced their final dividends of Rs. 5 and 20 cents per share respectively.