Gota’s exit propels bourse to biggest weekly gain in 2 months

• Hayleys share price gains by Rs. 4.50 and Expolanka Holdings increased by Rs. 4.75
• BIL up 6.8%, LOFC up 7% and SAMP up +4.7%

 The exit of President Gotabaya Rajapaksa propelled the Colombo stock market to post its biggest weekly gain in two months as investor sentiment turned bullish. 

Politically decisive week saw the indices rebounded sharply after two weeks of declines and posted their biggest weekly gains in two months, according to Asia Securities. The benchmark ASPI gained 387.13 points (+5.47%) and the S&P SL20 index improved by 155.34 points (+6.92%) during the week. Year to date however, ASPI is down by 39% and S&SPSL20 by 43%.

Average daily turnover for the week was Rs. 914 million, which, however, was far below the year to date daily average of Rs. 3 billion.

Investor sentiment was bullish yesterday with both indices up 2% and turnover improved to Rs. 1.1 billion. 

Asia Securities said the market ended the week on an upbeat note with the ASPI gaining 2.0% and the S&P SL20 index rising 2.7%, on the back of sharp price gains in front-line stocks EXPO (+2.7%), BIL (+6.8%), HAYL (+7.2%), LOFC (+7.0%), SAMP (+4.7%), SCAP (+9.8%), AAIC (+5.9%), LIOC (+2.8%), and LOLC (+3.4%). Turnover picked up to its highest level this week, led by EXPO (Rs. 236 million), BIL (Rs. 146 million), and HAYL (Rs. 116 million). 

It said following a 110-point gap-up opening, the ASPI continued buoyant momentum and reached an intra-day high of 7,497 (+179 points) in the first hour of the session. Following this, the index witnessed stabilisation and hovered in the range of 7,450-7,470 for the remainder of the session. The breadth of the market ended strong with 140 price gainers and 31 decliners.

Asia also said foreigners recorded a net inflow of Rs. 6.8 million. Net foreign buying topped in JKH at Rs. 12.5 million and selling topping in BIL.N at Rs. 6.6 million.

First Capital said the bourse rebounded to green as investors displayed a buoyant sentiment following the much-anticipated resignation of the former President Gotabhaya Rajapaksa. In consequence, turnover reflected a rise of 49.4% comparative to the weekly average turnover. 

“However, investors were on a defensive footing and adopted a wait and see approach, keeping a close eye on the developments on upcoming presidential and prime minister appointments, and future direction of the country to come out of the crisis,” First Capital added. 

It said the Index opened with a sharp upsurge and continued to escalate throughout the session before closing for the day at 7,468 gaining 150 points backed by the positive contribution of counters such as SAMP and HAYL. Turnover was driven by a joint contribution of 48% from the Capital Goods sector and Food, Beverage and Tobacco sector. 

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

The Capital Goods sector was the top contributor to the market turnover (due to Hayleys and John Keells Holdings) whilst the sector index gained 1.63%. The share price of Hayleys moved up by Rs. 4.50 (7.15%) to close at Rs. 67.40. The share price of John Keells Holdings closed flat at Rs. 122.

Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments) whilst the sector index increased by 3.89%. The share price of Browns Investments gained 50 cents (6.76%) to close at Rs. 7.90.

Expolanka Holdings and LOLC Finance were also included among the top turnover contributors. The share price of Expolanka Holdings increased by Rs. 4.75 (2.74%) to close at Rs. 178.25. The share price of LOLC Finance appreciated by 50 cents (7.04%) to close at Rs. 7.60.