Home » Breaking News » No cheer at stock market yet despite SLPP landslide

No cheer at stock market yet despite SLPP landslide

The Colombo stock market remained subdued for the second consecutive session, in an apparent failure by investors to cheer the landslide victory by the Sri Lanka Podujana Peramuna (SLPP) at last week’s General Election.

The All Share Price Index declined by over 25 points or 0.5% and the S&P SL 20 Index was down over 16 points or 0.7%. Turnover was a lacklustre Rs. 671.6 million.

The market closed sans any excitement on Friday too following final results of the 5 August Parliamentary Election on Thursday. The All Share Price Index in fact closed negative (0.37 points or 0.01%) whilst the S&P SL 20 Index managed to gain by only 10 points or 0.4%.

“Despite the political stability gained, investors took a step back with a cautious attitude while bracing for the pending corporate results, continuing the fall on the red zone for the second consecutive session,” First Capital said.

“The index experienced a downtrend since the beginning of the session during the early hours of trading due to the selling pressure in selective Banking and Capital Goods counters overpowering the buying interest in Plantation counters,” it added.

According to First Capital, within the last 30 minutes of trading the market recorded a slight recovery and closed at 5,151, losing 26 points.

The SLPP’s victory by a near-two-thirds majority at Wednesday’s Parliamentary Election was seen as a major boost for political stability, which businesses and investors yearn for. In that context most analysts were expecting the stock market to gain sharply, but bearish sentiments have caused concern.

Others said the market had previously factored in a convincing victory by the SLPP though there were doubts about securing the two-thirds majority.

Notwithstanding lacklustre performance on Friday, the ASPI posted its third straight weekly gain, closing the week 1% higher. The S&P SL20 gained 2.18% for the week.

Despite weekly gains on and off in recent months, year-to-date ASPI is down 16% and S&P SL 20 lower by 22.%. However since 12 May when the country began re-opening post-COVID, the stock market has risen by around 20%. Net foreign selling has crossed the Rs. 25 billion mark year-to-date as well.

NDB Securities said yesterday the ASPI closed in the red as a result of price losses in counters such as Dialog Axiata, Lion Brewery and Browns Investments, with turnover crossing Rs. 671 million.

High net worth and institutional investor participation was noted in Commercial Bank. Mixed interest was observed in Access Engineering and LOLC Holdings, whilst retail interest was noted in Maskeliya Plantations, Malwatte Valley Plantations non-voting and Lankem Developments.

Furthermore, foreigners closed as net sellers mainly due to foreign selling in Commercial Bank.

The Banking sector was the top contributor to the market turnover (due to Commercial Bank and Sampath Bank) whilst the sector index lost 0.85%. The share price of Commercial Bank decreased by Rs. 0.70 (0.91%) closing at Rs. 76.20 whilst foreign holdings decreased by 1,999,900 shares. The share price of Sampath Bank recorded a loss of Rs. 0.50 (0.40%) to close at Rs. 123.50.

Diversified Financials sector was the second highest contributor to the market turnover (due to LOLC Holdings) whilst the sector index decreased by 0.50%. The share price of LOLC Holdings closed flat at Rs. 137.60.

Access Engineering and John Keells Holdings were also included amongst the top turnover contributors. The share price of Access Engineering moved down by Rs. 0.70 (3.27%) to close at Rs. 20.70 while the share price of John Keells Holdings closed flat at Rs. 114.90.

Author: TELO Admin