CSE reverts to negative territory

The Colombo stock market yesterday reverted to negative territory as investors were wary despite policy rate cuts by the Monetary Board.

The ASPI declined by 0.34% and the S&P SL20 by 0.27%. Turnover was Rs. 672 million involving mere 21 million shares.

Asia Securities said after commencing the session on a positive note, the ASPI reached an intra-day high of 11,138 (+95 points), mainly supported by price gains in State-Owned Enterprises (SOEs). This was underpinned by the Government's tentative plans for the initial round of divestitures announced yesterday. 

SLTL (+13.3%), LHCL (+9.0%), and ECL (+15.1%) recorded sharp price increases during the session, however front-line stocks CALT (-4.1%), FCT (-3.9%), CFVF (-1.0%), and HAYL (-1.5%) ended in red, dragging down the ASPI. Eventually, the index closed with a loss of 38 points for the day.

SLTL (+9 points), LHCL (+4 points), and NDB (+4 points) ended as the major positive contributors to the ASPI. On the flipside, BUKI (-5 points), CFIN (-4 points), and HAYL (-4 points) were the main laggards on the index. The breadth of the market was negative with 60 price gainers and 101 decliners.

Turnover was led by JKH (Rs. 115mn). Market also saw net foreign outflow of Rs. 26.6 million.

First Capital said the market gradually climbed up during the morning session, recording an intraday high of 11,140 owing to the positive sentiment from the rate cut announced by the CBSL in-line with the expectations of the market. However, as the day progressed, the market was on a bearish trend owing to uncertainties around the IMF and the upcoming budget, and closed in the red zone at 11,043, losing 38 points.

Investor interest centered around SLT, ECL and LHCL after the government called for Expression of Interests (EOIs) on Hotel Developers Lanka (owning company of Hilton Colombo), Lanka Hospitals Corporation PLC and Canwill Holdings (Hyatt). Treasury shares picked up during the morning session following today’s policy rate cut but witnessed profit-taking towards mid-day.

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings and Piramal Glass. Mixed interest was observed in Sri Lanka Telecom, Capital Alliance and Asian Hotels & Properties whilst retail interest was noted in Browns Investments, People's Leasing & Finance and E-Channelling.

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings) whilst the sector index edged down by 0.12%. The share price of John Keells Holdings increased by 50 cents to Rs 190.50.

The Diversified Financials sector was the second highest contributor to the market turnover (due to Capital Alliance) whilst the sector index decreased by 1.48%. The share price of Capital Alliance moved down by Rs 3 to Rs 69.80.

Sri Lanka Telecom, Asian Hotels & Properties and Sampath Bank were also included amongst the top turnover contributors. The share price of Sri Lanka Telecom gained Rs 11 to Rs 94. The share price of Asian Hotels & Properties recorded a gain of 90 cents to Rs 63. The share price of Sampath Bank declined by 40 cents to Rs 67.