Lacklustre start at bourse in new week

The Colombo stock market saw a dull day’s trading with turnover recording Rs. 664 million and the All Share Price Index falling 0.52% to close below the psychological support level of 6,000 at 5,965 while the Milanka Price Index lost 0.05% to register 5,228.

The top turnover contributor list was dominated by fundamentally sound counters such as Distilleries, JKH and Commercial Bank, NDB Stockbrokers said in a report.

The highest contributor to turnover was Distilleries Corporation, which saw crossings of 1.06 million shares at Rs. 150 and contributed Rs. 168 million overall.

Among the other large contributors to turnover was John Keells Holdings which saw Rs. 123 million turnover generated. JKH’s share price rose by Rs. 4.40 to Rs. 178. Distilleries and John Keells Holdings accounted for close to 44% of the day’s turnover.

Commercial Bank contributed Rs. 35 million to turnover and its share price increased 20 cents to Rs. 99 when 351,400 shares traded. Bank, Financing and Insurance sector contributed heavily to the turnover (due to Commercial Bank, Janashakthi Insurance and People’s Leasing) and the sector index declined by 0.56%, while Janashakthi Insurance witnessed its share price increased by Rs. 0.20 (1.41%) to close at Rs. 14.50.

“The market continued to denote a bearish sentiment with activity levels witnessing a reduction over the year-to-date average levels,” SC Securities said.

“Colombo stocks reopened the trading for a new week with thin trading volumes,” Lanka Securities said, adding, “Fundamentally-sound stocks regained momentum while illiquid stocks closed with notable losses.”

Asia Wealth described the market’s behaviour as “erratic” whilst Arrenga Capital noted the market continued to remain quite sluggish. DNH Financial said investors continued to sit in the wings in anticipation of a decision regarding the prospect of a relaxation of credit rules for brokers.

Net foreign inflows were Rs. 4.7 million. The All Share Price Index has fallen 10.11% to 5,965 while the Milanka Price Index has dropped 25.96% to 5,228 year-to-date.

Arrenga said that the current lull sentiments in the market could be expected to remain within the next few weeks as well as investor participation is also interrupted by preparations for the festive season.

“However, we continue advising our investors to take shield of fundamental stock picking, taking advantage of the current attractive market valuations with the market currently trading at a four quarter trailing PER of 13.7X,” it added.

In the absence of any market moving news, DNH Financial expects the bourse to trade in a tight range over the next couple of days.

“However, with domestic economics and corporate fundamentals highly robust, we expect foreign investor interest in the bourse sooner than later as global markets continue to face headwinds notwithstanding recent positive developments in the Eurozone and the relative attractiveness of Sri Lankan equities. We continue to advise local investors, both retail and institutional, to take advantage of any price weakness in the market and secure positions in fundamentally-strong stocks ahead of the crowd,” DNH Financial added.