Stock market begins November on a negative note

• ASPI and S&P SL finished Oct. with 7.4% and 5% respectively, propelling YTD gain to 50% and 48.5%
• YTD net foreign selling tops Rs. 46 b mark 

The Colombo stock market began the penultimate month of 2021 on a negative note amidst lacklustre investor sentiment triggered by political under currents and external concerns. 

The All Share Price Index and the S&P SL20 Index lost 30 points each whilst turnover was Rs. 3.7 billion involving a mere 96.5 million shares. 

The lacklustre investor interest or them being on the side-lines was despite the release of impressive corporate earnings so far. Nevertheless, macro concerns remain; hence, less enthusiasm yesterday, though some believe there will be a fresh round of buying ahead of the presentation of the Budget 2022. 

The market began November after the previous month saw the ASPI complete a gain of 7.4% and the S&P SL20 improved by 5%. Year-to-date (YTD) until last Friday, ASPI delivered a 50% return and S&P SL20 offered 40.58%. Foreign investors, on the other hand, had been bearish with their net selling, topping the Rs. 46-billion-mark YTD. 

Asia Securities said the ASPI reversed its intra-day gains in the last hour of trading and eventually closed lower largely due to price declines recorded in heavyweights such as EXPO, BIL, and JKH. 

On the contrary, index heavy CLC ended the session with a 6.9% gain; however, turnover generated by the stock was relatively lower at Rs. 161 million. Excluding CLC’s contribution of 44 points, the ASPI declined by around 75 points at market close. Overall, activity was moderate with EXPO generating the highest turnover at Rs. 942 million during the session, followed by RCL at Rs. 424 million. 

“Following a 61-point gap up, the ASPI crossed the 10,200 level during market open and recorded an all-time high of 10,234 (+71 points) before witnessing a brief period of stabilisation within a narrow range of 10,200-10,230 in mid-afternoon trading. However, the index lost around 98 points during the final hour of trading and eventually slid into negative territory closing 31 points lower. The breadth of the market also turned negative with 51 stocks recording price gains against 144 decliners,” Asia said.

It said foreigners recorded a net inflow of Rs. 47 million while their participation declined to 3.6% of turnover (previous day 4.7%). Net foreign buying topped in RCL at Rs. 98 million and net selling topped in JKH at Rs. 26 million. 

First Capital said the bourse headed back to the negative territory while recording a two-week low turnover due to increased scepticism among investors over prevailing uncertain economic conditions. 

“Index peaked within the first minute of the session and managed to hold the position towards midday while hitting an intraday high of 10,236. Afterwards, the market failed to hold and scaled lower as the day progressed due to investors resorting to profit-taking in selected counters, closing at 10,132,” First Capital added.

It said turnover was led by the Capital goods sector, followed by the Transportation sector accounting for a joint contribution of 54%. 

NDB Securities said the ASPI closed in red as a result of price losses in counters such as Expolanka Holdings, Browns Investments and John Keells Holdings.

It said high net worth and institutional investor participation was noted in Sampath Bank and Commercial Bank. Mixed interest was observed in Expolanka Holdings, Royal Ceramics and Commercial Leasing and Finance whilst retail interest was noted in Browns Investments, Kotagala Plantations and Amana Bank. 

The Capital Goods sector was the top contributor to the market turnover (due to Royal Ceramics and ACL Cables) whilst the sector index lost 1.04%. The share price of Royal Ceramics gained 30 cents (0.52%) to close at Rs. 58.40. The share price of ACL Cables appreciated by Rs. 1.70 (2.58%) to close at Rs. 67.50. 

The transportation sector was the second highest contributor to the market turnover (due to Expolanka Holdings) whilst the sector index decreased by 2.54%. The share price of Expolanka Holdings decreased by Rs. 5.50 (2.54%) to close at Rs. 210.75.

Browns Investments and Commercial Leasing & Finance were also included amongst the top turnover contributors. The share price of Browns Investments moved down by 30 cents (2.70%) to close at Rs. 10.80. The share price of Commercial Leasing & Finance recorded a gain of Rs. 3.10 (6.87%) to close at Rs. 48.20