Stock market gathers more strength

Friday, 5 August 2022 00:22 -     - {{hitsCtrl.values.hits}}

  • Turnover hits four-month high; market capitalisation gains by Rs. 300 b in first four days of August

The Colombo stock market gathered more strength yesterday with turnover hitting a four-month high. 

The active S&P SL20 shot up by 3.5% and the benchmark ASPI gained by 1.84%. Turnover was Rs. 3.8 billion involving 150 million shares.

Market capitalisation crossed the Rs. 3.6 trillion mark thereby recording an increase of Rs. 301 billion in the first four days of August.

Asia Securities said the indices extended uptrend for the sixth consecutive session backed by sharp gains in front-line stocks EXPO (+8.8%), LOLC (+14.3%), LOFC (+12.0%), LIOC (+9.0%), AAIC (+13.5%), and SCAP (+11.5%) while CICX (+11.8%), and RCL (+9.6%) saw a pickup in buying interest during the session.

Notably, market turnover touched a four-month high at Rs. 3,800mn (previous session Rs. 2,677mn) led by EXPO (Rs. 956 million), LIOC (Rs. 524 million), MELS (Rs. 352 million), and LOFC (Rs. 345 million). However, activity in the Exchange was broad-based during the session as retail and HNI investors positioned themselves in undervalued stocks across sectors amidst the ongoing earnings season. 

The ASPI commenced the session on an upbeat note at 8,208 (+128 points) and moved in the range of 8,210-8,250 till mid-afternoon trading. The index touched an intra-day high of 8,286 (+206 points) at the back end of the session before settling at 8,229 (+149 points). LOLC ended as the biggest contributor to the ASPI (+41 points), followed by EXPO (+32 points), RCL (+13 points) and BIL (+10 points). The breadth of the market was positive with 118 price gainers and 90 decliners.

Asia also said foreigners recorded a net outflow of Rs. 206.3 million while their participation increased to 9.6% of turnover (previous day 2.5%). Net foreign buying topped in HAYL at Rs. 8.1 million and selling topped in MELS at Rs. 151.4 million.

First Capital said following the President’s detailed speech on debt restructuring and future economic plans, ASPI continued to scale high and continued the positive momentum for the sixth consecutive day while recording the highest turnover in four-months. 

Further, confirmation of support for an all-party government from all major parties, also uplifted investor sentiment. As the economic activities gradually returned to normalcy, retailers actively participated and drove the bull run to dominate the session and closed for the day at 8,229, gaining 149 points. 

Modest turnover of Rs. 3.8 billion recorded today was 221% higher than the monthly average turnover of Rs. 1.2 billion with Transportation and Food, Beverage and Tobacco sectors jointly contributed 46%. Despite recording robust participation, foreign investors continued to remain net sellers for the 3rd straight day, First Capital added. 

NDB Securities said high net worth and institutional investor participation was noted in Melstacorp, John Keells Holdings and CIC Holdings. Mixed interest was observed in Expolanka Holdings, Lanka IOC and ACL Cables whilst retail interest was noted in LOLC Finance, Browns Investments and Softlogic Capital. 

Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings) whilst the sector index gained 8.84%. The share price of Expolanka Holdings increased by Rs 17 (8.84%) to close at Rs 209.25.

Food, Beverage and Tobacco sector was the second highest contributor to the market turnover (due to Melstacorp and Browns Investments) whilst the sector index edged down by 0.11%. The share price of Melstacorp moved down by Rs 1.40 (3.29%) to close at Rs 41.10. The share price of Browns Investments appreciated by 40 cents (5.33%) to close at Rs 7.90.

Lanka IOC and LOLC Finance were also included amongst the top turnover contributors. The share price of Lanka IOC gained Rs 8.90 (8.98%) to close at Rs 108.00. The share price of LOLC Finance recorded a gain of one Rupee (12.05%) to close at Rs 9.30.