Home Market Investors choose to take profits hence the index falling

Investors choose to take profits hence the index falling

  • 05 Dec 2023
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Colombo stock exchange closed in the red zone today after a good run of 4 consecutive sessions in the positive. Index started off strong but gradually started its decline straight after and continued this trend till the end of the session as investors chose to take profits in counters such as COMB and DFCC which were the major contributors to the ASPI's decline.

The market could also be seeing a correction occurring as the past 4 sessions overinflated prices of counters, and hence the market closed with a 44 point fall at 10,700. Market turnover was recorded at LKR 711.2Mn, 35.3% lower than the average monthly turnover of LKR 1.1Bn.

Capital Goods and the Food, Beverages & Tobacco sectors were the largest contributors to the overall market turnover with a joint contribution of 44.0%. On a positive note, foreign investors turned net buyers, with a large appetite on JKH.

Secondary market ignites with buying interest across the board

The secondary market displayed buying interest across the board amidst moderate volumes and heightened activities. The 2Yr tenor, 01.06.25 traded at 13.70%, whilst 3Yr tenors, including 15.05.26 and 01.06.26 traded between the range of 14.20%-14.00%. 2027 maturities, including 15.01.27, 01.05.27 and 15.09.27 traded within the range of 14.35%-14.10%.

Furthermore, mixed activities were observed for 2028 maturities, with a selling interest on the 15.01.28 maturity which traded at 14.40%, while buying interest was evident on both 01.05.28 and 01.07.28, which traded within the range of 14.35%-14.15%.

At the long-end of the curve, maturities including 15.05.30, 01.12.31 and 01.07.32 traded at 14.30%. Meanwhile, CBSL announced the issuance of LKR 185.0Bn in T-Bills through an auction scheduled for tomorrow. Out of this, LKR 55.0Bn is expected to be raised from 91-day maturity, LKR 60.0Bn from 182-day maturity, and LKR 70.0Bn from 364-day maturity. Furthermore, in the forex market, the LKR depreciated against the greenback and closed at LKR 328.0 at the end of the day.

Courtesy: First Capital Research

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