Colombo stock market closed Wednesday session with mixed returns as the investors awaited for policy directions ahead of the prime ministers special speech. All share index plunge from 7,000 mark in the opening hours but managed to close higher along with the small improvement in investor activity. Benchmark index increased by 3.16 index points (+0.05%) to end at 7,003.57 while S&P SL20 index closed lower at 3,784.61, down by 2.13 index points or 0.06%.

Index performance was mainly driven by premier blue-chip, John Keells Holdings (closed at LKR 179.00, +1.1%) supported by (+31%YoY) positive interim results for the latest quarter. Further, Dialog Axiata (closed at LKR 11.40, +2.7%) and Overseas Realty (closed at LKR 21.60, +2.4%) contributed positively to the index performance. However, price declines in Sri Lanka Telecom (closed at LKR 48.00, -0.4%) and Commercial Bank (LKR 156.00, -1.3%) dragged S&P SL20 index to negative territory.

Daily market turnover was LKR 548mn. Commercial Bank topped the turnover list with LKR 87mn underpinned by a single crossing of 0.3mn shares at LKR 156.00. Access Engineering (LKR 46mn) was the second best contributor to the turnover supported by a single off-the-floor dealing of 1mn shares at LKR 23.00. Aggregate value of crossings accounted for 11% of the total turnover. John Keells Holdings (LKR 42mn) and Union Bank (LKR 29mn) were among top contributors to the turnover.

Despite the mixed returns, market breadth was positive where 102 scripts advanced, 76 scripts declined while 49 counters remained unchanged. Cash map marginally advanced from 42% to 45%. 26 counters touched 52wk low price levels.

Heavy investor activity witnessed in Ceylon Grain Elevators, Textured Jersey and John Keells Holdings. Following the favourable earnings results in Alufab, counter advanced to LKR 58.80 but closed lower at LKR 56.00, +6.3%. Moreover, tile segment counters such as Lanka Walltiles (+14.7%YoY), Lanka Ceramic (+20.2%YoY) and Lanka Tiles (+26.6%YoY) released positive earnings for the 2QFY16.

Foreign investors closed session on selling side with a net foreign outflow of LKR 64mn. Foreign participation was 25%. Net foreign outflows were seen in Commercial Bank (LKR 79mn), Access Engineering (LKR 45mn), Ceylon Grain Elevators (LKR 10mn) while net foreign inflow was mainly seen in Royal Ceramic (LKR 20mn).

Meanwhile, at today’s Treasury bill auction, T-bill yields of 3M and 6M dropped by 17bps and 12bps to 6.44% and 6.87% respectively while 12M T-bill yield declined to 7.00%, by 6bps. CBSL offered LKR 17bn worth of Treasury bills today and the auction was oversubscribed by 6.3 times with bids received amounting to LKR 107.4bn.

Lanka Securities Research