More foreign funds take flight from Colombo bourse

• Over Rs. 1 b of net selling yesterday pushing YTD figure to over Rs. 31 b; So far in July, over Rs. 4.5 b net selling
• Surpassing of Rs. 26 b to Rs. 31 b threshold happened within past 10 market days, fuelling fresh concerns 

Foreign selling at the Colombo stock market aggravated yesterday, reaffirming a trend so far this month, pushing the year to date figure to Rs. 31 billion.  The bourse saw Rs. 1.12 billion in net foreign selling largely on account of Cargills (Ceylon) Plc, which pushed the month to date figure to Rs. 4.57 billion and year to date to surpass the Rs. 31 billion mark. 

The surpassing of the Rs. 26 billion to Rs. 31 billion threshold happened within 10 market days, fuelling fresh concerns among capital market participants. This is despite some taking strength from the fact that locals have picked up what foreigners were selling. 

Exits by foreigners also come soon after a highly successful Sri Lanka Investment Forum, where a strong message was delivered to global participants that the country has immense future prospects. 

The market also closed on a negative note yesterday, bringing the positive run to a halt. 

The All Share Price Index declined by 19.5 points, or 0.24%, and the S&PSL20 closed almost flat. Turnover was above average at Rs. 3 billion with a high 219.1 million shares traded. 

For the week, however, the ASPI gained 114.76 points (1.46%) and S&P SL20 gained 51.26 points (1.72%). Turnover averaged Rs. 2.2 billion, up from Rs. 1.7 billion in the previous week.

First Capital said the bourse failed to sustain the upward streak of the last sessions although turnover posted a one-week record high. 

“Index opened on a positive note, however, witnessed a dip during the first 50 minutes of trading, followed by a recovery in midday. Thereafter, the market gradually veered down till the latter part of the session, followed by a sideways movement over the final hour of trading, closing at 7,967,” First Capital said. 

It said turnover was led by the Food and Staples Retailing sector, followed by the Transportation sector, collectively accounting for a joint contribution of 46%. 

Asia Securities said the indices opened on a positive note with the ASPI gaining 37 points, supported by price gains in index-heavy counters EXPO, NEST and DIST. However, the index reversed early gains as it declined during the second half of the session, as a result of profit-booking in recently appreciated counters and price losses in NIFL. 

Asia said foreigners recorded a net outflow of Rs. 1,121.4 million while their participation increased to 18.6% of turnover (previous day 5.6%). Estimated net foreign buying topped in LOLC.N at Rs. 1.1 million and net foreign selling topped in CARG.N at Rs. 929.3 million. 

NDB Securities said the ASPI closed in red as a result of price losses in counters such as LOLC Development Finance, Commercial Leasing and Finance and LOLC Holdings.

It said high net worth and institutional investor participation was noted in Cargills, Expolanka Holdings and Teejay Lanka. Mixed interest was observed in Singer Sri Lanka, LOLC Holdings and R. I. L. Property, whilst retail interest was noted in Industrial Asphalts, Browns Investments and Eden Hotel Lanka. 

During the week, the ASPI and the S&P SL20 gained 1.46% and 1.72%, respectively, whilst recording an average daily turnover of Rs. 2.25 billion.

Food and Staples Retailing sector was the top contributor to the market turnover (due to Cargills), whilst the sector index gained 0.70%. The share price of Cargills increased by Rs. 2.75 (1.11%) closing at Rs. 249.75, whilst foreign holdings decreased by 3,720,920 shares.

Transportation sector was the second-highest contributor to the market turnover (due to Expolanka Holdings), whilst the sector index increased by 3.01%. The share price of Expolanka Holdings gained Rs. 1.60 (3.02%) to close at Rs. 54.50.

Singer Sri Lanka, Teejay Lanka and LOLC Holdings were also included amongst the top turnover contributors. The share price of Singer Sri Lanka moved up by Rs. 0.20 (1.09%) to close at Rs. 18.50. The share price of Teejay Lanka recorded a gain of Rs. 0.70 (1.73%) to close at Rs. 41.20. The share price of LOLC Holdings declined by Rs. 3.75 (0.88%) to close at Rs. 422.25.