Confusion and uncertainty over polls pull CSE down sharply

• Rs. 90 b in value wiped out in past three sessions
• Rs. 22.5 b Rights Issue drags COMBank share price lower

The Colombo stock market dipped sharply yesterday amidst investor concerns over uncertainty and confusion over elections this year. 

The active S&P SL20 declined by 2% and the benchmark ASPI by 1% to a one month low. 

Turnover was Rs. 1 billion involving 55.6 million shares. The market has seen Rs. 90 billion in value wiped out in the past three sessions. Investors reacted negatively to Rs. 22.5 billion Rights Issue of Commercial Bank price declines of which impacted the indices and sentiments. (See also https://www.ft.lk/front-page/COMBank-to-raise-Rs-22-5-b-via-Rights-Issue/44-762325)

Asia Securities said the indices moved downwards mainly dragged by COMBN (-8.2%) and COMBX (-7.6%) following the bank’s Rights Issue announcement, which dampened market sentiment during the session. 

The ASPI commenced the session with a gap-down of 103 points, declining to 12,125, however saw a brief recovery to 12,169 (-59 points). Nevertheless, the index retreated, and slipped further, eventually closing at 12,102 (-126 points). COMBN (-56 points) came in as the biggest laggard on the ASPI during the session. Triggered by COMB’s announcement, NDB (-2.1%), HNBN (-0.9%), PABC (-1.8%), DFCC (-3.8%), and UBC (-2.0%) also saw price losses during the session, exerting downward pressure on the ASPI. On the flipside, LMF (+1.0%) and LALU (+1.2%) saw price gains during the session. 

Turnover was led by COMBN (Rs. 221 million), and SAMP (Rs. 207 million). Crossings accounted for 22.4% of turnover with 3 crossings recorded in SAMPN (Rs. 179 million), and 1 crossing each in LMFN (Rs. 34.2 million) and NTBN (Rs. 21.4 million).

Foreigners recorded a net outflow of Rs. 24.5millin. Net foreign buying topped in HAYC at Rs. 9.0 million and selling topped in SAMP.N at Rs. 25 million.

First Capital said the bourse experienced another day of negative sentiment and uncertainty. The ASPI closed at 12,102, falling to its lowest levels in the last month, marking a 1.03% decrease from the previous day, to which the most significant negative contributors were banks, predominantly COMB, DFCC, HNB, and NDB, where COMB contributed the most negatively to ASPI, reflecting unfavourable activity in the market, particularly in the banking sector following the news of the Commercial Bank rights issue. 

In contrast, SPEN, CARG, ASPH, and AHUN contributed positively to ASPI, where SPEN and CARG led the way. Increased selling activity took place in the market, further reflecting the low investor sentiment and scepticism in the market. 

The Banking sector led turnover at 51%, followed by the Food, Beverage and Tobacco, and Capital Goods sectors jointly contributing to 21% of overall turnover, further exhibiting heightened selling activity and negative sentiment within the banking sector.

The market overall experienced a day of significant uncertainty and low sentiment triggered by drawbacks in the Banking sector.

NDB Securities said high net worth and institutional investor participation was noted in Sampath Bank, Lanka Milk Foods and Nations Trust Bank. Mixed interest was observed in Commercial Bank, John Keells Holdings and Royal Ceramics whilst retail interest was noted in SMB Leasing, Browns Investments and Blue Diamonds Jewellery Worldwide. 

The Banking sector was the top contributor to the market turnover whilst the sector index lost 3.41%. The share price of Commercial Bank decreased by Rs. 9.25 to Rs. 103.50. The share price of Sampath Bank lost 30 cents to Rs. 77.50. The share price of Nations Trust Bank declined by 50 cents to Rs. 121.75.

The Food, Beverage & Tobacco sector was the second highest contributor to the market turnover whilst the sector index decreased by 0.48%. The share price of Lanka Milk Foods moved up by 30 cents to Rs 30.80.

John Keells Holdings was also included among the top turnover contributors. The share price of John Keells Holdings recorded a loss of one Rupee to Rs. 206.

Separately Royal Ceramic Lanka, Lanka Ceramic, Union Chemicals, Central Finance and Elpitiya plantations declared interim dividends of 90 cents, Rs. 1.20, Rs. 27, Rs. 2 and Rs. 5 respectively.