China, India debt relief support boosts Colombo bourse

Tuesday, 24 January 2023 02:08 -     - {{hitsCtrl.values.hits}}

  • CSE rakes in highest day gain in 2023 as indices reach three-month high on positive news
  • Market’s value up Rs. 163 b in two days; YTD net foreign inflow top Rs. 300 m mark

The Colombo stock market gathered more momentum yesterday rising to new highs supported by positive news of the initial announcement of Chinese and Indian debt relief to Sri Lanka.

The active S&P SL20 rose 3.5% and the benchmark ASPI by 3.13% which was the highest day-gain in the New Year. It propelled the indices to three month high.

Market capitalisation rose by Rs. 163 billion to Rs. 3.92 trillion from Rs. 3.76 trillion on Thursday after India’s announcement of debt relief support. Over the weekend China’s Export and Import Bank had extended support whilst similar expressions from other Chinese lending institutions or an all-encompassing financial assurance is still pending.

Nevertheless, local investors took heart from initial moves whilst foreigners remained net buyers bringing the year to date total to over Rs. 300 million.

Asia Securities said the market commenced the week on a strong note with the indices reaching a three-month high and turnover remaining above Rs. 2 billion level on Monday.

Sectorally, banking and financial sector stocks saw a significant pickup in activity, predominantly driven by price increases in COMB (+8.6%), SAMP (+7.3%), and VONE (+13.5%).

Turnover was led by BIL (Rs. 201 million), CFVF (Rs. 179 million), and EXPO (Rs. 112 million). 

Asia said the ASPI trended upwards throughout the session and crossed the 9,000 mark to reach an intra-day high of 9,025 (+307 points) in the second half of trading before settling at 8,991 (+273 points). VONE ended as the biggest contributor to the ASPI (+45 points), followed by COMB (+38 points), SAMP (+27 points), and LOLC (+20 points). The breadth of the market ended positive with 168 price gainers and 38 decliners.

Foreigners recorded a net inflow of Rs. 32 million with net foreign buying being most in BIL Rs. 42.7million and selling in LOFC at Rs. 12 million.

First Capital said the broad market continued to witness bullish activities for the fifth straight day as investors optimistically reacted to the recent developments, mostly as China agreed to the debt restructuring process after India affirmed its support last week.

The ASPI moved on a continuous upscale during the session with participation largely centred on retail favourites LOLC, LIOC and EXPO while the intraday high crossed the 9,000 psychological level. Furthermore, treasury counters such as CFVF, FCT and CALT attracted wider investor interest with anticipations on policy rates easing at the upcoming Monetary policy review meeting.

As the debt restructuring progressed positively, Banking sector counters COMB and SAMP, led the index to close firmly in the green with a sizeable gain of 273 points to close at 8,991.

NDB Securities said the ASPI closed in green as a result of price gains in counters such as Vallibel One, Commercial Bank and Sampath Bank.

It said high net worth and institutional investor participation was noted in Sampath Bank. Mixed interest was observed in Expolanka Holdings, First Capital Holdings and Capital Alliance whilst retail interest was noted in Browns Investments, Industrial Asphalts and LOLC Finance.

The Diversified Financials sector was the top contributor to the market turnover (due to First Capital Holdings, First Capital Treasuries and Capital Alliance) whilst the sector index gained 4.06%. The share price of First Capital Holdings gained Rs. 3.10 (8.40%) to close at Rs. 40. The share price of First

Capital Treasuries recorded a gain of Rs. 1.50 (5.86%) to close at Rs. 27.10. The share price of Capital Alliance appreciated by Rs. 2 (6.45%) to close at Rs. 33.

The Food, Beverage & Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments) whilst the sector index increased by 2.09%. The share price of Browns Investments increased by 40 cents (5.97%) to close at Rs. 7.10.

Expolanka Holdings was also included amongst the top turnover contributors. The share price of Expolanka Holdings moved up by Rs. 1.75 (0.88%) to close at Rs. 199.75.