Dull investor sentiment drove Colombo equities to negative territory on Friday. Bourse snapped gains recorded in previous session to touch 6 week low of 7,215.11 with a decline of 30.39 index points or 0.42% while 20-scrip S&P SL index shed 21.01 index points (-0.53%) to end at 3,957.83, recording a 7 week low.

Premier blue-chips such as Ceylon Tobacco Company (closed at LKR 960.00, -2.0%), Commercial Bank (closed at LKR 169.50, -0.9%) and Hatton National Bank (closed at LKR 215.00, -1.6%) dragged index performance.

Daily market turnover was LKR 540mn. Tokyo Cement non-voting topped the turnover list with LKR 112mn underpinned by two off-the-floor dealings of 1.9mn shares at LKR 42.00-43.50. Commercial Bank non-voting (LKR 69mn), Textured Jersey (LKR 65mn) and Hemas Holdings (LKR 33mn) were next best contributors to the turnover.

Two bulk trades were witnessed in Commercial Bank non-voting (0.5mn shares at LKR 134.50) and Textured Jersey (0.7mn shares at LKR 32.00). The crossings accounted for 31% of the total turnover.

Losers surpassed the gainers 120 to 64, while 62 counters remained unchanged. Cash map marginally increased from 37% to 41%. 14 counters touched 52wk low prices while only 02 scripts managed reach 52wk high price levels.

Shares of John Keells Holdings warrant 0022, Textured Jersey and First Capital Holdings were heavily traded during the session.

Subsequent to the corporate disclosure of Vidullanka, stock advanced to 52wk high price of LKR 11.00 but closed with flat returns at LKR 10.80. Meanwhile, banks such as Commercial Bank, Hatton National Bank, DFCC Bank, Union Bank, HDFC Bank witnessed negative returns while Nation Development Bank and Amana Bank remained unchanged.

Moreover, Hikkaduwa Beach Resort advanced to LKR 15.90, +5.3%, following to the announcement of first & final dividend of LKR 0.12 per share. Further, Pegasus Hotel of Ceylon was transferred from the Main board to the Diri Savi board upon the request of the company. Stock closed lower at LKR 40.00 (-0.3%).

Foreign investors closed the day on buying side with a net inflow of LKR 190mn. Foreign participation was 27%. Net foreign inflows were seen in Tokyo Cement non-voting (LKR 111mn), Commercial Bank non-voting (LKR 68mn), Hemas Holdings (LKR 32mn) while net foreign outflow was mainly seen in Textured Jersey (LKR 9mn).

During the week, benchmark index dipped by 135.41 index points or -1.84% while S&P SL20 index declined by 91.32 index points (-2.26%). However, low investor activity was witnessed during the week where average daily market turnover was LKR 604mn. Commercial Bank emerged as the top contributor to the turnover with LKR 352mn followed by Ceylon Hotel Corporation (LKR 304mn), John Keells Holdings (LKR 213mn) and Textured Jersey (LKR 150mn). Subsequent to the decline in the index, market PE declined from 13.8x to 13.5x.

Ceylon Hotel Corporation (+4%), Talawakella Tea Estates (+7%) and Ramboda Falls (+9%) were among top gainers for the week whilst Eden Hotel (-15%), Asia Siyaka (-9%) and Dunamis Capital (-7%) were among top losers.

Foreign investors closed the week on selling side with a notable net foreign outflow of LKR 109mn. Foreign participation was 25%. Net foreign outflows were mainly seen in John Keells Holdings (LKR 102mn), Commercial Bank (LKR 51mn) and Aitken Spence (LKR 51mn) while net foreign inflows were mainly seen in Tokyo Cement non-voting (LKR 116mn) and Commercial Bank non-voting (LKR 68mn). Subsequent to this weeks’ net foreign outflow, year-to-date net foreign outflow advanced to LKR 3.5bn.

Lanka Securities Research