Colombo equities concluded weekly operations with positive returns on Friday on hopes of a stable national government. Mr. Ranil Wickremesinghe sworn in as the Prime Minister of the country today and the two major political parties signed MoU to work together for next two years.

Benchmark index grabbed 26.25 index points or 0.35% to end at 7,476.07 while 20-scrip S&P SL index witnessed marginal returns to close at 4,140.68, up by 3.09 index points or 0.07%.

Price increases in blue chips such as Ceylon Tobacco (closed at LKR 960.00, +0.6%), CT Holdings (closed at LKR 164.00, +9.3%), Commercial Bank (closed at LKR 175.10, +0.8) and Hemas Holdings (closed at LKR 93.00, +3.3%) pushed index performance to greener territory.

Daily market turnover was LKR 959mn, which was below weekly average daily turnover of LKR 1.5bn. Commercial Bank topped the turnover list with LKR 145mn underpinned by a single crossing of 0.5mn shares at LKR 173.30. High caps such as Distilleries (LKR 65mn), Cargills Ceylon (LKR 48mn) & John Keells Holdings (LKR 42mn) were next best contributors to the turnover.

Several off-the-floor dealings were recorded in Distilleries (0.2mn shares at LKR 300.00), John Keells Holdings (0.1mn shares at LKR 191.00) and Cargills (Ceylon) (0.15mn shares at LKR 181.00). Aggregate value of crossings represented 22% of the total turnover.

Signaling the positive momentum, 129 counters advanced, 83 declined while 50 counters remained unchanged. Cash map witnessed an increase from 35% to 48%. 11 stocks managed to reach 52wk high prices while 7 counters touched 52wk low price levels. Out of 7 counters, three hotel sector counters namely Eden Hotel Lanka (LKR 20.70), Marawila Resort (LKR 3.00) and Hikkaduwa Beach Resort (LKR 15.00) declined to 52wk lows. In contrast, industrial counters, Piramal Glass (LKR 7.10), Central Industries (LKR 116.00) and Richard Pieris Exports (LKR 222.90) advanced to one-year high.

Heavy investor interest was reflected in Sierra Cables, East West Properties, Lanka Ventures and Taprobane Holdings. Further, poultry segment continued to improve returns where Three Acre Farms (LKR 129.90, +4.1%), Bairaha Farms (LKR 185.50, +2.8%) and Ceylon Grain Elevators (LKR 84.90, +3.7%) end on positive ground.

John Keells Holdings voting share declined by 0.3% to close at LKR 190.00 and along with the voting script, both warrants declined sharply. John Keells Holdings warrant 0022 slipped to LKR 23.00 but managed to close higher at 23.90 (-9.8%) and warrant 0023 closed at LKR 35.20, down by 8.6%.

Selected banking sector scripts such as National Development Bank, DFCC Bank, Sampath Bank, Pan Asia Bank and HDFC Bank recorded negative returns.

Lee Hedges declared first & final dividend of LKR 1.20 per share. Moreover, Madulsima Plantations rights were closed at LKR 0.10 on its renunciation day and voting share closed higher at LKR 10.00 (+4.2%).

Foreign investors closed the session on selling side with a net foreign outflow of LKR 10mn. Foreign participation was 20%. Net foreign outflows were mainly seen in Commercial Bank (LKR 51mn), Access Engineering (LKR 13mn), John Keells Holdings (LKR 9mn) while net foreign inflow was mainly seen in Distilleries (LKR 65mn).

According to the external sector performance report for June 2015, exports during the month declined by 4.2% to USD 944mn while imports increased by 13.5% to USD 1.6bn. Accordingly, the trade balance further widen by 51.9% to USD 689mn during the first 6 months of 2015. Meanwhile during the two quarters of 2015, government has raised USD 650mn (-56.7%YoY) via international sovereign bonds.

The movement in market index was mild during the eventful week despite the positive earnings and conclusion of general election. All share index advanced by 8.83 index points or 0.12% while S&P SL20 index declined 8.24 index points (-0.20%) during the week. The high activity level was witnessed during the week where average daily market turnover crossed LKR 1bn to record LKR 1.6bn. Nations Trust Bank topped the weekly turnover list with LKR 726mn followed by Distilleries (LKR 570mn), John Keells Holdings (LKR 515mn) and Bairaha Farms (LKR 358mn).

Lanka Cement (+41%), Three Acre Farms (+35%) and Richard Pieris Exports (+29%) were among top gainers for the week whilst Janashakthi Insurance (-12%), Brown & Company (-10%) and Lanka Hospitals (-7%) were among top losers.
Foreign investors were net sellers for the week with a net foreign outflow of LKR 85mn. Foreign participation was 24%. Net foreign outflows were seen in Commercial Bank (LKR 99mn), Laugfs Gas non-voting (LKR 63mn) and Access Engineering (LKR 60mn) while net foreign inflows were seen in Distilleries (LKR 193mn), Sierra Cables (LKR 42mn) and Three Acre Farms (LKR 24mn).

Lanka Securities Research