Colombo bourse closed above 7,300 mark for the first time in five months as investor sentiment build up in anticipation of political stability after the parliamentary polls scheduled to be held in two weeks’ time. Benchmark index bagged 52.90 index points or 0.73% to close at 7,313.97 while 20-scrip S&P SL index retook the 4,100 index mark to end at 4,105.08, incline of 27.19 index points or 0.67%. Accordingly year-to-date main index return and S&P SL20 index return flipped back to greener territory, recording an increase of 0.2% & 0.4% respectively.

Bourse continued to trade higher led by sustained buying in blue-chips such as Ceylon Tobacco (closed at LKR 949.00, +3.7%), John Keells Holdings (closed at LKR 197.50, +1.2%), Access Engineering (closed at LKR 27.50, +10.0%) and Distilleries (closed at LKR 290.00, +1.7%).

Daily market turnover surged to 11 week high of LKR 3.6bn, lifted by single crossing of 1.2mn shares in Ceylinco Insurance which changed hands at LKR 1,602.00. Ceylinco Insurance grabbed 53% of the total turnover with LKR 1.9bn. Numerous off-the-floor dealings were recorded in John Keells Holdings (0.9mn shares at LKR 198.50), Bimputh Finance (1.6mn shares at LKR 61.00) and Lanka Walltiles (0.2mn shares at LKR 130.00). Aggregate value of crossings accounted for 60% of the total turnover.

John Keells Holdings (LKR 278mn), Bimputh Finance (LKR 156mn), Textured Jersey (LKR 118mn) and Access Engineering (LKR 103mn) were next best contributors to the turnover.

Reflecting the optimistic sentiment, 154 counter advanced against 69 declines while 34 remained unchanged. Cash map increased to 55% from 44%. 22 counters managed to reach 52wk high prices while only Union Chemicals (LKR 450.00) and Ceylon Leather Products – warrant 14 (LKR 0.10) dropped to 52wk low price levels.
Poultry sector counters continued show gains where Bairaha Farms (LKR 139.90), Ceylon Grain Elevator (LKR 65.30) and Three Acre Farms (LKR 82.00) step to a fresh 52wk high prices. Additionally, finance segment scripts such as Softlogic Finance (LKR 57.00), Vallibel Finance (LKR 66.50), Abans Finance (LKR 38.90), Citizen Development Business Finance voting (LKR 111.00) and non-voting (LKR 95.00) advanced to 52wk highs.

High investor interest continued roll in to John Keells Holdings where all three counters witnessed increases. Warrant 0022 and warrant 0023 advanced to LKR 34.00 (+5.3%) and LKR 43.00 (+6.7%) respectively. Meanwhile, Access Engineering, HVA Foods, MTD Walkers and Textured Jersey attracted heavy investor preference during the session.

Following the interim results and dividend announcement in Ceylon Tobacco, counter advanced to LKR 950.00 but closed lower. Company posted a profit growth of 20% in June quarter and declared an interim dividend of LKR 24.00 per share. Subsequent to the decline of 10% net earnings in Asian Hotels and Properties, the counter declined to 64.30 but closed higher at LKR 64.90 (-0.9%).

Moreover, Swadeshi Industrial Works announced a final dividend of LKR 1.00 per share during the trading session.

Foreign investors erased year-to-date net foreign outflow with a net inflow of LKR 2bn while foreign participation was marked at 35%. Net foreign inflows were dominated by Ceylinco Insurance (LKR 1.9bn) along with Central Finance (LKR 20mn), Access Engineering (LKR 17mn) while net foreign outflow was mainly seen in Bairaha Farms (LKR 17mn).

Lanka Securities Research