Stock market loses Rs. 475 b in value in 11 days after dizzy rise in January

The bearish run at the Colombo Stock Market has seen Rs. 475 billion in value wiped off in just 10 market days so far in February with yesterday’s fall adding Rs. 143 billion. 

Both indices yesterday dipped sharply by 4% amidst below average Rs. 4.27 billion turnover, as investors were left dumbstruck, whilst some were looking for factors or people who caused the recent downfall.

Major contributors to yesterday’s 326 points dip in ASPI were LOLC (down by 18% or Rs. 79.75 to Rs. 354.74), Vallibel One (down 11.5% to Rs. 61.90) and Browns Investments (down 10.7% to Rs. 5).

In jubilant January, the market’s value shot up by Rs. 829 billion or 28% to Rs. 3.78 trillion. However, by yesterday it had come down to Rs. 3.134 trillion. Year-to-date the ASPI is up by 12% and S&P SL20 is by 15% lower after notching up 28% and 33% in January.

Some investors and analysts continued to blame unnecessary stepped-up regulatory action, whilst others pinned the downfall to over-expectations in the market, especially after dizzy heights in January. 

“The market is starved of new buying and investors. Recent slump has constrained existing investors. Institutional investors both local and foreign remain out of the market. This is the dilemma,” analysts opined. 

Luckily for the Bourse, yesterday’s dip was gradual and didn’t trigger circuit break leading to suspension of trading. However the weak-hearted investor sentiment is despite most of the top companies reporting impressive results or turnaround with improved outlook for the next few quarters. 

NDB Securities said high net worth and institutional investor participation was noted in Sampath Bank, Sanasa Development Bank and Hemas Holdings. Mixed interest was observed in Vallibel One, Browns Investments and Expolanka Holdings, whilst retail interest was noted in Dipped Products, LOLC Holdings and Haycarb. 

The Capital Goods sector was the top contributor to the market turnover, due to John Keells Holdings (JKH), whilst the sector index lost 4.64%. The share price of JKH declined by Rs 3.25 (2.03%) to close at Rs. 156.75. 

The Diversified Financials sector was the second highest contributor to the market turnover, due to LOLC Holdings, whilst the sector index decreased by 8.99%. 

Dipped Products, Expolanka Holdings and Sampath Bank were also included amongst the top turnover contributors.

The share price of Dipped Products lost Rs. 6.20 (9.32%) to close at Rs. 60.30. The share price of Expolanka Holdings moved down by Rs. 3.70 (7.49%) to close at Rs. 45.70. The share price of Sampath Bank recorded a loss of Rs. 2.75 (1.64%) to close at Rs. 165.00, whilst foreign holdings decreased by 1,067,403 shares.

Net foreign selling worth Rs. 200 million was recorded yesterday. Estimated net foreign buying topped in CTHR at Rs. 19.2 million and net foreign selling topped in SAMP at Rs. 176 million.