Stock market suffers biggest plunge with Rs. 700 b wiped off

The Colombo stock market suffered its biggest plunge yesterday with nearly Rs. 700 billion wiped off after being inflicted with two trading halts as investors apparently looked chickened out to both macro and corporate issues. 

The All Share Price index closed over 3% down or 374 points and the S&P SL20) lower by over 3.6% or 145 points. Turnover was Rs. 4.5 billion involving 188.5 million shares.

Investor sentiment was battered by the virtue of two trading halts after the market dip 5% and 2.5% in quick succession. Consensus was the market needed new buyers on the belief of a dramatic turnaround of the country amidst rising odds as longstanding players took a cautious and sceptical view.

Asia Securities said trading on the exchange was halted twice as sharp price declines in heavyweight stocks dragged the S&P SL20 index as much as 7.5%, triggering two market-wide circuit breakers during the session. 

The first circuit breaker went into effect at 11:17 a.m., following a 5% drop in the S&P SL20 index to 3,733 (-145 points). After a 30-minute halt, the second circuit breaker was triggered at 12:13 p.m., leading to another 30-minute trade halt, as the S&P SL20 index fell 7.5% to 3,642 (-295 points). 

Similarly, the ASPI also tumbled below the 11,000 level during the session, recording an intra-day loss of 797 points (-6.9%) at 10,795. However, the indices saw a decent recovery during closing hours as dip buyers entered active stocks at relatively lower prices capitalising on recent 

price declines.

The benchmark indices eventually ended the trading day recording a loss of more than three percent each. The ASPI closed at 11,218 (-375 points), its lowest level since 9 December 2021, while the S&P SL20 index closed at 3,792 (-145 points), its lowest level since 25 November 2021. Front-line stocks EXPO (-7.2%), BIL (-11.5%), SCAP (-12.0%) LOLC (-7.7%), LOFC (-11.4%), CLC (-5.9%), HAYL (-5.2%), VONE (-5.6%) and RCL (-4.6) closed with hefty losses amid panic selling by retail and HNI investors. 

Asia said turnover was led by EXPO (Rs. 1,168 million), BIL (Rs. 614 million), and LOLC (Rs. 228 million). Nevertheless, foreigners remained on the buying side for the fourth straight session, recording a net inflow of Rs. 67 million (previous session – Rs. 82 million) with continuous net buying observed in EXPO (Rs. 66mn) and DIAL (Rs. 35 million). Overall, 28 stocks ended higher while 200 stocks closed in red.

First Capital said the bourse headed to the red zone with a steep fall one more time during the week amidst the escalation of uncertainties. Market halted twice for 30 minutes while S&P SL20 index fell initially by 5.0% and then by 7.5% following major panic selling by investors resulting in the ASPI recording the intraday decline of nearly 800 points while falling below 11,000 level. Following the second trading halt, the market gradually recovered yet closed lower at 11,218, losing 375 points. 

First Capital said turnover was led by retail participation mainly from the Transportation and Food, Beverage and Tobacco sectors accounting for a joint contribution of 46%. 

NDB Securities said high net worth and institutional investor participation was noted in Hayleys, LOLC Holdings and Royal Ceramics. Mixed interest was observed in Expolanka Holdings, LOLC Holdings and Royal Ceramics whilst retail interest was noted in Browns Investments, SMB Leasing and Industrial Asphalts. 

Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings) whilst the sector index lost 7.15%. The share price of Expolanka Holdings decreased by Rs. 20.50 (7.16%) to close at Rs. 266.00. Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments) whilst the sector index decreased 4.80%. 

The share price of Browns Investments lost Rs. 1.50 (11.54%) to close at Rs. 11.50. LOLC Holdings, Royal Ceramics and Lanka Orix Finance were also included amongst the top turnover contributors. The share price of LOLC Holdings moved down by Rs. 76.75 (7.68%) to close at Rs. 922.25. The share price of Royal

Ceramics recorded a loss of Rs. 2.80 (4.58%) to close at Rs. 58.30. The share price of Lanka Orix Finance declined by Rs. 2.60 (11.35%) to close at Rs. 20.30.

Separately Seylan Bank voting and nonvoting announced its first and final scrip dividend of Rs. 3 per share for voting and nonvoting.