Yesterday’s negativity continued today as well, in the Colombo Stock Exchange. Despite opening at a higher note, the market experienced a steep decline throughout the latter half.

The ASPI further weakened by 183 points to close at 20,077, almost closer to the 20,000-mark. Moreover, the S&P SL20 closed at 5,730, shedding 53 points.

DIAL, COMB, HNB, JKH, and RICH were the top negative contributors to the ASPI. Higher retail investor engagement drove the turnover, although it underpinned the drop in ASPI, due to margin calls on penny stocks held by retail investors.

As opposed to yesterday, HNW investors remained subdued. Turnover stood at approximately LKR 1.1Bn, marking a decrease of 20.4% over the monthly average of LKR 1.4Bn.

Food, Beverage & Tobacco sector led the daily turnover with a share of 22%, followed by the Capital Goods, and Banking sectors collectively contributing 33%. Foreign investors remained net buyers, posting a net inflow of LKR 22.6Mn.

BOND MARKET

Trading turns tepid amid T-Bond auction

PDMO’s Treasury Bond auction took centre stage today while the secondary market withstood a lacklustre trading session. Investor sentiment appeared mixed prompting the yield curve to remain largely anchored.

Moreover, trading volumes were constrained amid limited investor participation. At the short end of the yield curve, 15.09.2029 traded between 10.95% to 11.02%. Further along the curve, 15.10.2030 traded at 11.40% while 01.12.2031 changed hands between 11.55% to 11.60%.

Activity was also visible on select mid-tenors with 01.11.2033 trading at 11.95% and 15.10.2034 changing hands at 12.15%. The PDMO concluded the scheduled bond auction, raising a total of LKR 80.7Bn, lower than the initial offer of LKR 100.0Bn. The 2029 and 2031 maturities bearing coupons of 11.00% and 12.00% raised LKR 20.0Bn and LKR 30.0Bn respectively, on par with the initial offer.

The 2036 maturity, with a coupon rate of 10.85% raised LKR 30.7Bn, lower than the initial offer of LKR 50.0Bn. On the external front, the LKR marginally depreciated against the USD, standing at LKR 330.98/USD, compared to LKR 330.85/USD seen earlier. Market liquidity in the banking system slightly expanded to LKR 400.82Bn compared to LKR 398.95Bn recorded previously.

-First Capital Research-