Investor sentiment remain buoyant, bolstered by anticipated positive effects of DSA

The Colombo Bourse closed positive in October 2024, with the benchmark All Share Price Index (ASPI) rising +7.7% MoM to 12,771 points (an increase of +916 index points MoM) CT CLSA SECURITIES (PVT) LTD said.

Meanwhile, the more liquid S&P SL20 index increased +11.9% MoM to 3,864 points (an increase of +411 index points). Colombo stock exchange CEO, Rajeeva Bandaranaike said that one main reason for this is the political stability that is currently in place. “This has cleared doubts of uncertainty among investors which prevailed before the presidential election.”

He said that in addition the increase of business activities in the country has also created a positive vibe among investors. Bandaranaike also said that due to this corporate earnings too have increased and too positively contributed towards the Colombo Bourse closing positively in October. He also opined that the banking sector too performed well last month.

Meanwhile, a senior member of the CT CLSA said that in October 2024, the Colombo Stock Exchange delivered a strong performance, with the benchmark All Share Price Index (ASPI) rising by 7.7%, making it the second-best performing equity index in Asia after the Karachi All Share Index (KSE).

“Investor sentiment remained buoyant, bolstered by the anticipated positive effects of Sri Lanka’s Debt Sustainability Analysis (DSA) and the political and economic stability following the presidential elections.”

This upward trend was led by major banks such as Commercial Bank of Ceylon (COMB), Hatton National Bank (HNB), and Sampath Bank (SAMP), driven by a reduced impact from International Sovereign Bond (ISB) exposure and expected loan book growth, as private credit expansion has accelerated in recent months. Additionally, renewed interest in John Keells Holdings (JKH) was evident following the opening of its Cinnamon Life properties, alongside increased activity in the plantation, insurance, and finance sectors. Average daily turnover increased to Rs.2,757 Mn in October 2024 (vs. Rs.1,653 Mn in September 2024).

Top contributors to monthly turnover were Sampath Bank (SAMP, Rs.6,486 mn, 78mn shares), John Keells Holdings (JKH, Rs.4,869 Mn, 24 Mn shares) and Hatton National Bank-Vot (HNB-N, Rs.4,489 Mn, 21Mn shares).

Net foreign outflows recorded at Rs.359mn in October 2024 following a net foreign outflow of Rs.638mn in September 2024. During the month, net foreign buying was seen in John Keells Holdings (JKH, +Rs.829mn), Commercial Bank of Ceylon-Vot (COMB-N, +Rs.413mn), and Sampath Bank (SAMP, +Rs.174mn), whilst net foreign selling was seen in Dialog Axiata (DIAL, -Rs.753mn), CIC Holdings-Vot (CIC-N, -Rs.274mn), and Hayleys (HAYL, -Rs.191 mn).