Joy for investors as Colombo stock market gains after 7-day loss

• Net foreign buying for third consecutive day with June already registering Rs. 206 m inflow
• SEC extends relaxed rules pertaining to extension of credit to end June

There was cheer for investors yesterday as the Colombo stock market gained after suffering a 7-day loss and foreigners remained net buyers though local activity levels were moderate.

The active S&P SL20 gained by 0.6% and the benchmark ASPI by 0.4%. Turnover was only Rs. 1.4 billion involving 70 million shares.

Asia Securities said following seven sessions of losses, the indices returned to positive territory on Thursday supported by price gains in JKH (+2.6), EXPO (+1.5%), TJL (+5.1%), and RICH (+4.4%). Turnover was led by RFL (Rs. 293 million), EXPO (Rs. 161 million) and LIOC (Rs. 138 million). 

Asia said the ASPI commenced the session on a positive note, scaling to an intra-day high of 8,153 (+88 points) in the first hour of trading. However, the index gradually stabilised thereupon and hovered in the narrow range of 8,100-8,125 during closing hours. 

“Overall retail and HNI activity remained at moderate levels as investors maintained a ‘wait-and-see’ approach following the latest tax reforms. The breadth of the market ended almost neutral with 87 price gainers and 84 decliners,” Asia added. 

It also said foreigners recorded a net inflow of Rs. 186 million while their participation increased to 20.6% of turnover (previous day 6.8%). Net foreign buying topped in RFL at Rs. 278.9 million and selling topped in MELS at Rs. 63.

First two days of June has already seen a net foreign inflow of Rs. 206 million. 

First Capital said the bourse posted a marginal gain after seven straight session losses as SEC granted permission to relax rules pertaining to the extension of credit. As a result, index spiked during the first half of the session while hitting an intraday high of 8,154 gaining nearly 89 points. 

Eventually, the trend could not be sustained as selling pressure gathered pace again and the market remained on a downward trajectory yet managed to close the day on a positive note at 8,100, gaining 35 points. 

Turnover was boosted by the acquisition of RFL by a foreign high net worth investor with a stake of 52% which led to a foreign exchange inflow to the country. Turnover was led by the Food, Beverage and Tobacco sector with a contribution of 21%, while another 20% was solely contributed by RFL. 

NDB Securities said high net worth and institutional investor participation was noted in Ramboda Falls, Melstacorp and Commercial Bank. Mixed interest was observed in Expolanka Holdings, Lanka IOC and Hela Apparel Holdings Ltd., whilst retail interest was noted in Browns Investments, Dialog Axiata and LOLC Finance. 

Food, Beverage and Tobacco sector was the top contributor to the market turnover (due to Browns Investments and Melstacorp), whilst the sector index lost 0.61%. The share price of Browns Investments recorded a loss 10 cents to close at Rs. 9.80. The share price of Melstacorp declined by one Rupee (2.27%) to close at Rs. 43.

The Consumer Services sector was the second highest contributor to the market turnover (due to Ramboda Falls) whilst the sector index increased by 1.19%. The share price of Ramboda Falls increased by Rs. 8.20 (53.95%) to close at Rs. 23.40.

Expolanka Holdings and Lanka IOC were also included amongst the top turnover contributors. The share price of Expolanka Holdings gained Rs. 3.25 (1.54%) to close at Rs. 214. The share price of Lanka IOC moved up by Rs. 3.60 (6.05%) to close at Rs. 63.10.