Investor confidence continued to the last trading session of the week and the bourse wrapped the weekly operations in positive territory extending the winning streak for the seventh day. Benchmark equity index increased notably, fueled by gains in telecos and financial services sector, and bagged 37.82 index points or 0.53%. to reach 7 week high of 7,161.96. S&P SL20 index retook the 4,000 mark to close at 4,013.75, up by 22.54 index points (+0.56%) as 10 of its 20 stocks, advanced.

Blue-chips such as Dialog Axiata (closed at LKR 11.30, +3.7%), National Development Bank (closed at LKR 280.00, +5.3%), Hatton National Bank (closed at LKR 214.00, +0.9%) and Lanka Orix Leasing Company (closed at LKR 107.50, +4.8%) drove the index performance to the greener territory.

Daily market turnover boosted to LKR 1.9bn with bulky crossings in Aitken Spence (7.5mn shares at LKR 98.00), Ceylon Tobacco (0.3mn shares at LKR 890.00) and John Keells Holdings (0.6mn shares at LKR 182.70). Aggregate value of off-the-floor dealings accounted for 59% of the total turnover.

Accordingly, Aitken Spence topped the turnover with LKR 738mn as foreign investors departed with substantial outflows. Ceylon Tobacco (LKR 300mn), John Keells Holdigs (LKR 174mn) and Sanasa Development Bank (LKR 94mn) were next best contributors to the turnover.

Out of 254 counters, 160 advanced, 49 slipped while 45 remain unchanged. Cash map came down to 57% from 66%. 9 counters managed to reach 52wk high prices whereas 7 counters touched to 52wk low price levels.
Following the newspaper article of Chilaw Finance regarding delisting of shares, trading of shares ceased during the session. According to the disclosure made by Chilaw Finance, company rejected the reference of delisting the company and amalgamating with the Richard Peiris Finance Limited.

Asian Alliance Insurance attracted heavy investor preference prior to the dealing suspension for the sub-division of shares and counter advanced to 52wk high price of LKR 219.00. However stock closed below with a gain of 6.6% at LKR 217.80.

Meanwhile substantial trading activity was seen in counters such as Dialog Axiata, Janashakthi Insurance and Textured Jersey.

Subsequent to end of ‘Go Slow’ campaign of estate workers, plantation sector counters such as Kegalle Plantations (LKR 139.50, +4.6%), Namunukula Plantations (LKR 71.00, +4.0%), Kahawatte Plantations (LKR 31.00, +1.10), Talawakella Tea Estates (LKR 36.40, +3.7%), Horana Plantations (LKR 24.20, +7.1%), Kelani Valley Plantations (LKR 65.00, +1.7%), Elpitiya Plantations (LKR 23.90, +2.1%), Malwatte Valley Plantations (LKR 4.00, +2.6%) Balangoda Plantations (LKR 21.80, +3.3%) and Bogawantalawe Tea Estates (LKR 12.30, +4.2%) advanced during the session but on low volume.

Foreign investors continued to be on the selling side for the third consecutive day with net foreign outflow of LKR 907mn. Foreign participation was 40%. Net foreign outflows were seen in Aitken Spence (LKR 735mn), John Keells Holdings (LKR 69mn), Tokyo Cement (LKR 36mn) while net foreign inflow was mainly seen in Janashakthi Insurance (LKR 9mn).

During the week the main index advanced by 177.84 points or 2.6% while S&P SL 20 index inclined by 108.48 points or 2.8% supported by the positive direction reflected in political arena. The active investor participation improved where average daily market turnover for the week crossed LKR 1bn mark. John Keells Holdings topped the weekly turnover list with LKR 743mn followed by Aitken Spence (LKR 743mn) and Ceylon Tobacco (LKR 363mn). Following the advancement in the index, market PE inclined to 13.7x from 13.4x.

Kegalle Plantations (+46%), Bimputh Finance (+21%) and Janashakthi Insurance (+13%) were among top gainers for the week whilst Finalys Colombo (-7%), Tess Agro (-6%) and Asia Asset Finance (-6%) were among top losers for the week.

Foreign investors were net sellers for the week with a net foreign outflow of LKR 1.05bn. Foreign participation was 43%. Net foreign outflows were seen in Aitken Spence (LKR 734mn), Hatton National Bank (LKR 166mn) and Ceylon Tobacco (LKR 89mn) while net foreign inflows were seen in Sampath Bank (LKR 100mn), Laugfs Gas (LKR 97mn) and National Trust Bank (LKR 74mn). Subsequent to the net foreign outflow, year-to-date net foreign inflow witnessed in last week turned to a net foreign outflow of LKR 763mn.

Yields on short-term gilts inclined for the third consecutive week where 3M & 6M yields moved up by 8bps and 5bps to 6.22% and 6.31% while 12M yield advanced by 3bps to 6.31%.

Lanka Securities Research