Stock market loses Rs. 127 b in value as 2-weeks’ gains get erased

The Colombo stock market has lost Rs. 127 billion in value during the past three sessions with gains enjoyed for two weeks erased sparking fresh investor concerns. 

Suffering its sharpest dip in recent weeks, the All Share Price Index (ASPI) dipped by 2.6% or 198 points and the S&PSL20 declined by 2.85% or 86 points. 

Last Thursday marked nine consecutive days of gains at the Colombo Stock Exchange as ASPI was up 12.85% year to date and S&PSL20 up 16.75%. However by yesterday the gain has reduced to 8.58% for ASPI and 12.03% for S&PSL20.

Market capitalisation which was Rs. 3.34 trillion, was down to Rs. 3.22 trillion. 

Turnover yesterday amounted Rs. 3.7 billion with 197 million shares traded.

First Capital said the Bourse continued to play on a negative note throughout the session reversing the gains generated during the past two weeks. 

“The index displayed a slight volatility during the early hours of trading and thereafter recorded a significant decline to close at 7,355 losing 198 points,” it said. 

First Capital said the market turnover remained strong, dominated by the Material sector, closely followed by Food, Beverage and Capital Goods sector with a joint contribution of 68%. 

NDB Equities said indices closed in red as a result of price losses in counters such as LOLC Holdings, Expolanka Holdings and Hayleys.

It said high net worth and institutional investor participation was noted in Ceylon Cold Stores. Mixed interest was observed in LOLC Holdings, Dipped Products and Hayleys, whilst retail interest was noted in Swisstek, Expolanka Holdings and Browns Investments. Foreign participation in the market remained at subdued levels with foreigners closing as net sellers.

Materials sector was the top contributor to the market turnover (due to Dipped Products), whilst the sector index lost 5%. The share price of Dipped Products recorded a loss of Rs. 4.20 (7.04%) to close at Rs. 55.50.

Food, Beverage & Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments), whilst the sector index decreased by 1.61%. The share price of Browns Investments decreased by Rs. 0.30 (4.69%) closing at Rs. 6.10 whilst foreign holdings decreased by 6,564,285 shares.

Expolanka Holdings, Hayleys and LOLC Holdings were also included amongst the top turnover contributors. The share price of Expolanka Holdings lost Rs. 3.10 (6.05%) to close at Rs. 48.10. The share price of Hayleys moved down by Rs. 6.40 (7.70%) to close at Rs 76.70. The share price of LOLC Holdings declined by Rs. 20 (5.86%) to close at Rs. 321.50.

Net foreign outflow was Rs. 88.6 million as against Rs. 188 million on Monday. The year-to-date outflow was Rs. 20.7 billion. 

Estimated net foreign buying topped in DIPD at Rs. 9 million and net foreign selling topped in BIL at Rs. 40 million according to Asia Securities.

Capital Trust said that even though the market's recent downward trend is disappointing, it believes that the bourse will gradually reverse course with the release of the FY2021 corporate results providing tailwind support.

“Consequently, we advise investors to take advantage of the current weakness and focus on accumulating fundamentally robust in high growth sectors with a long term investment horizon,” it added.