Stock market tumbles further; Rs. 578 b in value wiped off in 3 days

•  S&P circuit breaker trips twice and closes in the red as locals fret over worsening ground situation
• Foreigners seize opportunity of bargains; net foreign inflow near Rs. 1.5 b mark in March

The Colombo stock market tumbled further and forcefully yesterday, increasing the loss of value in the past three days to over Rs. 570 billion as local investors reacted negatively to worsening ground situation though foreigners stepped up buying at bargain prices.

Sending fresh fears, the more active S&P SL20 Index crashed by 5% triggering a halt only to be followed by a further 2.5% dip. The benchmark index dipped further as well.

Since last Friday, the market capitalisation has declined by Rs. 578 billion and is now below the psychological Rs. 4 trillion mark. The ASPI and S&P SL20 are down 24% year to date, as against 14% dip on Friday.

Some die hard investors took comfort in the late rally thanks to bargain hunters and expect the market to rebound today with fresh buying by locals too.

Asia Securities pinned sharp losses to price declines in EXPO, BIL, LOLC, DIAL, COMB, MELS, HAYL and ACL. The ASPI touched an intra-day low of 8,933 (-362 points) before closing at 9,295. 

The more liquid S&P SL20 index closed at 3,196 (-142 points) after plunging as much as 7.5%, triggering two circuit-breakers during the session. Turnover came in at Rs. 3,297 million led by EXPO, BIL and MELS. Overall, 32 stocks recorded price gains while 192 settled with losses.

Foreigners recorded a net inflow of Rs. 368 million while their participation increased to 7.1% of turnover (previous day 5.8% ). Net foreign buying topped in LLUB.N at Rs. 215.7 million and selling topped in RCL at Rs. 4.9 million.

So far in March foreigners have been net buyers to the tune of nearly Rs. 1.5 billion.

First Capital said the Bourse fell lower for the third straight day while continuing to pursue a negative run for the ninth consecutive Wednesday.

“In the midst of concerns over extension of power cut hours to 10-hours, index witnessed a back to back fall during the day as investors depicted a preference to move away from equity,” First Capital said. 

Consequently, the market was halted twice within the first one hour since the S&P SL20 index fell 5% and then 7.5% from the previous close. As selling pressure mounted, the index fell below the psychological level of 9,500 and ended the day at a six month low closing of 9,295, losing 353 points. Turnover was led by the Transportation and Food, Beverage and Tobacco sectors with a joint contribution of 46%. 

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

It said high networth and institutional investor participation was noted in Melstacorp, Hayleys and John Keells Holdings. Mixed interest was observed in Expolanka Holdings, LOLC Holdings and

Lanka Orix Finance whilst retail interest was noted in SMB Leasing non-voting, Browns Investments and Industrial Asphalts.

Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings) whilst the sector index lost 9.06%. The share price of Expolanka Holdings decreased by Rs. 22.25 (9.07%) to close at Rs. 223.

Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments and Melstacorp) whilst the sector index decreased by 3.45%. The share price of Browns Investments lost 70 cents (7.87%) to close at Rs. 8.20. The share price of Melstacorp moved down by Rs. 2 (4.55%) to close at Rs. 42. 

Chevron Lubricants and Lanka Orix Finance were also included amongst the top turnover contributors. The share price of Chevron Lubricants recorded a loss of Rs. 3.80 (4.22%) to close at Rs. 86.30. The share price of Lanka Orix Finance appreciated by Rs. 1.50 (13.76%) to close at Rs. 12.40.

Separately, Alumex, Haycarb, Kelani Valley Plantations and Dipped Products announced their interim dividends of 20 cents, 75 cents, one rupee and 50 cents per share respectively.