Speculative and punting bull loses steam

The Colombo stock market yesterday understandably lost steam after enjoying four days of a perceived “speculative and punting” bull run.

With settlements due from mid-last week purchases, some fear further downward pressure today as well.

“Profit taking weighed on the speculative four-day rally to close indices in red. Activity was also subdued amidst low retail investor participation. However, institutional and high net worth investor participation was witnessed to a certain extent,” NDB Stockbrokers said.                

The ASI was down 34.56 points or 0.50% and MPI by 32.5 points or 0.52%, whilst turnover was a modest Rs. 1.5 billion.

NDB said the Manufacturing sector was the main contributor to the market turnover (due to Blue Diamonds Jewellery Worldwide), while the sector index increased by 0.20%. The share price of Blue Diamond Jewellery Worldwide increased by Rs. 0.60 (6.98%) and closed at Rs. 9.30.

The Land & Property sector also contributed significantly to the market turnover (due to Seylan Developments and East West Properties). The sector index decreased 1.97%. Seylan Developments was the largest contributor to the market turnover. The share price increased by Rs. 0.10 (0.73%) and closed at Rs. 13.80.

“Profit taking was witnessed in Commercial Bank and Laugfs Gas, while interest renewed in E-Channelling and Dipped Products,” NDB Stockbrokers added.

“The indices dipped on selling pressure amid low activity levels, driven by trades on manufacturing, property and finance counters,” noted John Keells Stock Brokers.

The best performing sector was Oil (+0.85%), whilst the worst was Investment Trusts (-2.66%).

Asia Wealth Management said the bourse tumbled from its bull rally when both indices moved to the red zone. “The overall activity levels were dominated by retail investors seeking to create profits from speculative counters,” it added.

Ceylinco Seylan Development emerged as the top contributor with a circa of 11% of the day’s volume on the back of retail participation. Similarly Blue Diamond Jewellery Worldwide and East West Properties also witnessed similar interest.

Further institutional interest was active on Commercial Bank of Ceylon and Laugfs Gas, which witnessed cumulative crossings amounting to 270k at Rs. 250 and 1.9 m at Rs. 42 respectively. Meanwhile, Hatton National Bank and Colonial Motors saw small sized blocks of cumulative 200k and an individual 100k changing hands at Rs. 219 and Rs. 295 respectively.

Foreign purchases amounted to Rs. 184.9 m, whilst foreign sales amounted to Rs. 194.4 m.

Arrenga Capital said that despite initiating in the green, the market lost ground subsequently. This was as a result of the profit taking by the retail investor segment. The Property sector counters including Seylan Developments and East West Properties continued with the momentum, backed primarily by retail participants, with the latter registering a price gain of 9.8% closing at Rs. 19.10. East West Properties was caught to SEC’s 10% price band rule with effect from today. Blue Diamonds Jewellery also witnessed retail interest, with the counter gaining by 6.9% today to close at Rs. 9.19.

Banking sector heavyweights including Commercial Bank and Hatton National Bank saw active institutional investor involvement during yesterday’s trading. Commercial Bank witnessed parcels carrying 270k shares being transacted at Rs. 250 whilst Hatton National Bank saw two mid-sized blocks carrying 100k shares each, being crossed off at Rs. 219. Renewed institutional participation was evident in Laugfs Gas, with the counter registering two crossings totalling to 1.9 m shares being transacted at Rs. 42.

Arrenga also said the Poultry sector rally was seen subdued with Ceylon Grain Elevators and its subsidiary Three Acre Farms appearing among top price losers for the day, each registering price dips of 15.9% and 13.7% respectively; whilst Three Acre Farms fell under the 10% price band yesterday.

Furthermore, Colonial Motors saw a parcel of 105k shares being crossed off at Rs. 295 whilst Dipped Products also registered a block of 500k shares being crossed at Rs. 99. The latter registered a price gain of 16.2% during trading closing at Rs. 113.90.

Meanwhile, accumulation continued in heavy index counters, John Keells Holdings and Aitken Spence. Interest continued in Nestle Lanka as the counter registered a total of 21.9k shares being traded with a share price appreciation of 4.1% for the day.

Lanka Securities said price depreciation in index heavy counters such as Lanka Orix Leasing Company Plc (down Rs. 1.70), Sri Lanka Telecom Plc (down Rs. 0.40) and Commercial Bank Plc (down Rs. 1.10) dragged down the overall market performances.