Colombo stocks closed notably higher on Friday, posting strong weekly gains amid central banks decision to keep the policy rates steady. ASI closed 56.43 points or 0.78% higher at 7,269.05 while S&P SL 20 index closed up 30.44 points or 0.75%, at 4,071.65.

The strong demand for blue chips lifted the ASI to a near-9 week high led by John Keells Holdings (LKR 193.00,+1.6%), Commercial Bank (LKR 170.00,+1.0%) and Peoples Leasing (LKR 25.00,+3.7%).

In today’s trading session, turnover reached LKR 1.6bn with 43mn shares changing hands. John Keells Holdings made the top contribution of LKR 244mn with the support of several crossings amounting to 0.7mn at price range of LKR 193.50-194.00. Large bank shares recorded notable turnover with Commercial Bank (LKR 178mn), DFCC Bank (LKR 153mn) and Nations Trust Bank (LKR 62mn) making the highest contribution. Off-the-floor deals were reported in Commercial Bank (0.9mn shares at LKR 169.00), DFCC bank (0.5mn shares at LKR 198.00), Sampath Bank (0.2mn at LKR 261.00), Nations Trust Bank (0.5mn shares at LKR 106.00) and Seylan Bank (0.2mn shares at LKR 106.50). The crossings represented 31% of the total turnover.

The positive sentiments were reflected in the broad market as the gainers outweighed the losers 170 to 51 while 36 counters remained unchanged. The cash map remained same at 60%. 20 counters touched 52 week high prices while only three counters touched 52 week low price levels.

Tiles sector continued to touch fresh 52 week highs along with poultry sector stocks such as Ceylon Grain Elevators and Three Acre Farms. Moreover, mid-caps such as Textured Jersey, Alumex, ACL Cables, United Motors, Dipped Products and CIC were among the counters that touched 52 week high during today’s session.
John Keells Holdings voting share and warrants continued to be the investor favorite and led the trades followed by Asian Alliance Insurance, Vallibel One and Abans Electricals. Asian Alliance commenced trading after the subdivision of shares and the counter closed at LKR 21.60,+1.0%.

Shares of Citizen Development Business Finance reached fresh high subsequent to the 38% growth in profits reported in June quarter. The voting share closed at LKR 110.00,+2.9% while non-voting share closed at LKR 95.00,+5.6%. Shares of Keells Foods appreciated 3.3% to close at 146.00 amid the 86% profit growth in June quarter.

Foreign investors increased stakes today with a net foreign inflow of LKR 77mn. Foreign participation was at 20%. Top net inflows were seen in John Keells Holdings (LKR 79mn), Expo Lanka (LKR 31mn) and Lanka Milk Foods (LKR 22mn) while top net outflow was mainly seen in DFCC Bank (LKR 62mn).

The bourse closed the week on a strong note continuing the positive sentiments from the last week. The ASI gained more than 100 points for the second consecutive week, as it closed 107.09 points or 1.5% higher this week. S&P SL 20 gained 57.90 points or 1.44% during the week. Premier blue-chips John Keells Holdings (LKR 931mn) and Commercial Bank (LKR 748mn) made notable contribution to the weekly turnover while Asiri Hospitals also recorded a turnover of LKR 815mn subsequent to the foreign purchases on Thursday.

Interestingly, small caps such as Watawala Plantations (+19%) and Dankotuwa Porcelain (+16%) were among the top gainers while Kegalle Plantations (-40%) was among the top losers as it dividend became XD this week.

Foreign investors were active during the week and foreign activities represented 25% of the market turnover. Boosted by the purchases in Asiri Hospitals (LKR 806mn), the net foreign inflow of the week reached LKR 361mn, reducing the year-to-date net foreign outflow to LKR 401mn. Notable net foreign inflows were further seen in DFCC Bank (LKR 449mn) and John Keells Holdings (LKR 151mn) while top net outflows were seen in Commercial Bank (LKR 383mn) and Hatton National Bank – nonvoting (LKR 85mn).

Meanwhile at the Treasury bill auction yields inclined where yields of 3M and 6M treasuries inclined by 3bps and 7bps to 6.25% and 6.38% respectively whilst 12M yield advanced by 8bps to 6.39%. CBSL offered LKR 24bn worth of Treasury bills and the auction was oversubscribed by 3.3 times with bids received amounting to LKR 80bn. It was decided to accept LKR 31bn.

Lanka Securities Research