Market regains ground; ASPI crosses 6, 000-point mark

• Investors cheer govt.’s stance to refrain from further lockdowns 
• Brokers say strong Sept. quarter earnings also key reason for market performance
• Turnover tops Rs.4.2bn recording 3-week high
• Brokers say increased high net worth investor and retail activity witnessed

The main All Share Price Index (ASPI) of the Colombo Stock Exchange (CSE) yesterday crossed the 6, 000-point threshold as investors reacted positively to the government’s decision to lift police curfew in the Western province on Monday and implying that further lockdowns unlikely despite continuous discovery of new 
COVID-19 cases. 

ASPI gained 98.2 points or 1.66 percent to close at 6, 004.11 while more liquid S&P SL20 gained 30.47 points or 1.31 percent to close at 2, 348.30. The day’s turnover topped Rs.4.2 billion.

The ASPI crossed the 6, 000-point mark on September 29 for the first time since January, but the market was unable to sustain the momentum the following day and the index tumbled back below the 
psychological threshold.

“Apart from the news that authorities may not go for future lockdowns, strong September quarter earnings also resulted in the positive investor sentiment and the resultant rise in the indices,” a stock market analyst, who preferred anonymity said.

Price gains in counters such as LOLC Holdings, Dipped Products, Dialog, Hayleys and Browns Investment powered the ASPI’s rise beyond the 6, 000-point mark.

The top five contributors to yesterday’s turnover were: Dipped Products (Rs.588.2mn), Expolanka (Rs.559.6mn), Hayleys (Rs.438.1mn), Browns Investment (Rs.225.4mn) and Haycarb (Rs.185.7mn).

“Indices saw strong gains with the ASPI surpassing the 6,000 mark as investors took more confidence in the President’s statement dismissing any likelihood of an island wide lockdown,” Asia Securities said. 

“Activity was mainly dominated by HNI interest in the manufacturing sector, however, retail activity remained strong too,” they added. 

Foreign participation remained low at 4.4 percent (previous day 7.3 percent) with net outflows of Rs.309.24 million dominated by Dipped Products.

Brokers said Dipped Product’s fourth largest shareholder Promer Overseas SA, which had over 4.1 million Dipped Products shares or 6.8 percent as at September 30, 2020 were among the sellers.

Foreigners continued to be sellers in the market with net foreign selling topping Rs.309 million yesterday.

Hayleys group shares lead the rally

Hayleys PLC (HAYL), Dipped Products PLC (DPL) and Haycarb PLC (HAYC) yesterday led a major rally in blue chip shares. 

By the close of yesterday’s trading shares in HAYC were up 21.7 percent to record the best performance of the day and to close at Rs.474.20 with 423 thousand shares trading hands, while over 1.57 million DPL shares were traded to close at Rs.393 up by 18.9 percent. Similarly, HAYL shares gained 12.9 percent to close trading at Rs.392.10 with over 1.18 million shares being traded.