The Colombo stock market showed a remarkable turnaround last week with sharp gains by both indices and heavy turnover with several second and mid-tier stocks gaining aided by impressive earnings.
Ending two weeks of negative run as well a bearish October-finish, the All Share Price gained by
6% last week and the more active S&P SL 20 Index by near 4%. The gain moved the ASPI to the brink of possible shift to a year to date positive territory for a third time in recent months. In previous occasions, worsening of COVID-19 or profit taking led to ASPI languishing in negative territory.
As of Friday, the YTD performance of ASPI is negative 0.8%. whilst the S&P SL20 still lagging with negative 19%.
Last week also saw an average daily turnover of Rs. 3.35 billion, last experienced consistently in early to mid-October. In the previous week, the average was Rs. 1.3 billion.
Elated by the performance of the Colombo Bourse despite the lockdown, Money, Capital Markets and Public Enterprise Reform State Minister Nivard Cabraal tweeted: “Investor confidence levels are indeed encouraging.”
Acuity Stockbrokers said equities experienced a turnaround this week after two consecutive
weeks of losses as positive earnings from select stocks particularly in the material sector boosted investor sentiment.
“The possibility of easing curfews from 9 November also added to investor confidence this week which led the benchmark index to cross the key psychological mark of 6,000 points on Thursday,” it added.
Acuity said turnover levels continued to increase during the week, rising from Rs. 1.3 billion on Monday to reach nearly Rs. 5 billion by Friday, supported by heavy buying interest in mid-cap stocks such as EXPO which continued to dominate weekly turnover levels and contribution of 8.4% to total gains for the week. Buying interest was also visible in DIPD (which recorded 503% Y-o-Y growth in Net Profit to Rs. 1.4 billion in Q2’FY21), and its parent company HAYL.
Local HNI and institutional investors continued to remain largely on the side-lines as crossings for the week accounted for a mere 6% of total market turnover (4% last week), with investor interest mainly focused on VPEL (26.3% of crossings), JKH (19.5% of crossings) and COMB (14.6% of crossings).
Foreign investors were net sellers this week with total net outflow amounting to Rs. 1.32 billion relative to previous week’s total of Rs. 840 million.