Turnover in billions the new norm at Colombo stock market

• CSE enjoys 2nd consecutive day of over Rs. 5 b turnover and over 40,000 trades

The Colombo stock market produced a second day of over Rs. 5 billion in turnover due to prolific trading by rejuvenated retail and high-net-worth individual investors with key price indices turning positive once again.

Yesterday’s Rs. 5.5 billion turnover was hot on the heels of Rs. 5.03 billion on Tuesday.

Brokers and investors as well capital market promoters are enjoying the new rally. In the past few months CSE has been enjoying an average daily turnover of over Rs. 1 billion.

The All Share Price Index (ASPI) gained by 87 points to 1.5% to 5,890 points and S&P SL20 Index improved by 43 points or 1.8% to close at 2,346 points. Major contributors to ASPI’s gain yesterday were Hayleys PLC, Commercial Bank, Carson Cumberbatch, JKH (biggest contributor to turnover with Rs. 713 million), and LOLC.

Last month, the market in terms of ASPI posted its highest monthly gain of 12.3% since 2012 with daily turnover of Rs. 2.4 billion. In August the turnover averaged Rs. 1.8 billion daily and the ASPI gained by 4%. Year to date, however, ASPI is down 4% still and S&PSL20 lower by 20%.

Number of trades yesterday was 40,763, again the second consecutive day of over 40,000 trades. Tuesday’s figure of 41,686 was the highest in nine years.

Piramal Glass which reported impressive second quarter earnings (see details on Page 3), figured as second highest in turnover and gainer percentage wise with share price up Rs. 1.80 or 26% to close at Rs. 8.80 with 66.4 million shares traded for Rs. 570 million. On Tuesday it shot up by 40% or Rs. 2. Hayleys Fibre PLC, Hayleys PLC and Haycarb PLC, too, figured among top 10 gainers, percentage wise.

Sierra Cables, among stocks to dominate on Tuesday with 12% stake (64 million shares) changing hands, continued to draw more interest with 53 million shares traded for Rs. 327 million and share price up 18.5% to Rs. 6.40.

Likewise Panasian Power, another star on Tuesday, saw 106.3 million of its shares traded for Rs. 473.7 million with share price up 7 to close at Rs. 4.40. Speculation was shareholder director Dr. T. Senthilverl continued to shed small stakes in PAP as evident on Tuesday.

Several high-net-worth investors figured in Vallibel Power Erathna, which saw 44 million shares traded for Rs. 354 million. The share price rose by 2.5% to Rs. 8.

Speculation was that HNWI Imtiaz Buhardeen, who sold half of his estimated 15% stake in Sierra Cables by Wednesday, was using the cash to pick up quantities in PAP on Tuesday as well as Vallibel Power Erathna yesterday. His foray into the renewable energy sector has elicited interest with some brokers suggesting he was likely to pick up more quantity at correct prices.

Analysts said increased interest in the power sector is due to the fact that it has performed very well in the past year, and the sector is proven to be insulated from the negative effects of COVID-19 economic slowdown.

First Capital said the Bourse reverted back to the green zone, recording an upsurge amidst heavy retail participation. It added that turnover recorded above Rs. 5 billion for the second consecutive session setting a new nine-month high on the back of Capital Goods and Materials counters which made a joint contribution of 55%.

“Index experienced a gradual uptrend since the beginning of the session due to the buying interest in selective Materials counters and closed at 5,890 with an advance of 87 points,” First Capital added.

Despite sustained local interest foreigners continued to exit. Net foreign outflow yesterday was Rs. 810 million as against Rs. 141 million on Tuesday. Month to date, net outflow was Rs. 3.95 billion, and year to date the figure is Rs. 43.8 billion.

NDB Securities said the ASPI closed in green as a result of price gains in counters, such as Hayleys, Commercial Bank and Carson Cumberbatch.

It said high-net-worth and institutional investor participation was noted in John Keells Holdings, Piramal Glass Ceylon, and Vallibel Power Erathna. Mixed interest was observed in Panasian Power and Expolanka Holdings, whilst retail interest was noted in Sierra Cables, Alumex and Tokyo Cement Company non-voting.

Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings), whilst the sector index gained 3.58%. The share price of John Keells Holdings increased by Rs. 2.30 (1.77%) to close at Rs. 131.90. The materials sector was the second highest contributor to the market turnover (due to Piramal Glass), whilst the sector index increased by 7.89%.

New attraction Expolanka Holdings was also included amongst the top turnover contributors though its share price dipped by Rs. 0.80 (4.60%) to close at Rs. 16.60.

Separately Serendib Land announced a first and final dividend of Rs. 25 per share.