The Colombo stock market has lost Rs. 85 billion in value within a week owing to multiple reasons, including the return of lack of confidence and wait-and-see attitude.
Market capitalisation yesterday was Rs. 2,442 billion, as opposed to Rs. 2,527 billion on 16 August when the SEC relaxed rules on broker credit to clients. On that day the market’s year to date return was 6.25%, whereas it has been reduced to 2.66% by yesterday.
Yesterday the ASPI dipped 49 points or 0.7% and MPI by 25.7 points or 0.4%. Total turnover was a poor Rs. 1.1 billion, even lower than the year to date daily average of Rs. 2.8 billion. Foreigners continued to exit with net outflow being Rs. 55 million yesterday.
At least two broking firms said investors were adopting a wait-and-see attitude.
“The market continued its downward spiral as retail investors adopted a wait-and-see approach in light of the upcoming credit clearance process,” Asia Wealth Management said. “The wait-and-see approach adopted by investors along with profit realisation pushed the Colombo benchmark, the All Share Price Index (ASPI) into the red,” added SC Securities.
It said the market continued to slide as investors remained on the sidelines, providing little support to the main market indices which have been losing ground for the last four days.
Arrenga Capital said the Colombo bourse continued its bearish sentiments, despite renewed institutional investor involvement in selected blue chips including John Keells Holdings, Aitken Spence and Sampath Bank. “Retail play calmed down with month-end clearing taking activity levels below the annual average,” it added.
John Keells Stock Brokers said: “Selling pressure continued to push the indices lower amid low turnover levels with trades centred on banks, diversified and land and property counters.”
Arrenga said Colombo Land & Development continued to be sought after by retail and high net worth investors, contributing 8.9% of the day’s turnover. Renewed institutional participation was evident in Brown & Company as it registered two parcels carrying 100k each seen crossed off at Rs. 275.0.
High net worth investor participation continued in National Development Bank, which also witnessed two parcels totalling 500k shares being changed hands at Rs. 135 and Rs. 137 each. Meanwhile, heavy weight John Keells Holdings witnessed two blocks carrying 100k each being dealt at Rs. 208 and Rs. 212 each.
Seylan Bank witnessed renewed institutional participation, as the counter saw a parcel of 531.2k shares being transacted at Rs. 60. Despite the renewed investor attention on the counter, it closed marginally low at Rs. 59.9 (down 1.5%).
Institutions were also seen active in Tokyo Cement [Non-Voting], driving the counter to register a price gain of 3.2% closing at Rs. 42 today. Subsequent to yesterday’s gain of 40.96% by Asiri Hospital Holdings, profit taking on the counter led it to appear among the top price losers today as it dipped by 17.9% to close at Rs. 9.6. Furthermore, HVA Foods, East West Properties and Tess Agro were among the retailers’ favourite pick list for the day.
Asia said there was renewed by institutional and high net worth investor interest in the diversified
conglomerate Expo Lanka. A few small and mid-scale crossings took place which bolstered the day’s turnover to make up for lacklustre retail response.