Colombo Equities surrendered early gains and closed lower for the eighth straight session on Wednesday, recording the longest losing streak since February 2014 as rising interest rates continued to weigh on the investor sentiment. At today’s T-bill auction, the yields rose across the board with 3-month, 6-month and 1-year yield reaching 7.10% (+21bps), 7.31% (+33bps) and 7.37% (+38 bps) respectively. The auction was over-subscribed by 4.5 times. Since mid-December T-bill yields have increased approx. 1.0 - 1.5%, and have been one of the reasons for the lackluster performance seen in Colombo Bourse in the recent past.

ASI lost 19.86 points (-0.28%) to close at 7,110.19 while S&P SL 20 index closed at 4,070.74 with a drop of 16.93 points (-0.41%). Among the blue-chips, prices of Ceylon Tobacco (closed at LKR 1,020.00, -1%), Sri Lanka Telecom (closed at LKR 46.30, -1.5%) and Bukit Darah (closed at LKR 690.00, -1.4%) fell during the session dragging the index performance to the negative territory.

Losers surpassed the gainers 103 to 70 while 59 counters remained unchanged. Cash map declined to 45% from 55%. 03 counters reached 52wk high prices while 15 counters dropped to 52wk low prices.

Institutional activity led the turnover to a two-day high of LKR 946mn John Keells Holdings emerged as the top contributor to the turnover for the tenth consecutive day. The counter recorded a turnover of LKR 329mn supported by multiple crossings amounting to 1.2mn shares at a price of LKR 205.00 per share. Further, Distilleries (LKR 94mn), National Development Bank (LKR 72mn) and Hatton National Bank (LKR 60mn) made notable contributions to the turnover.

Negotiated deals were recorded in counters such as National Development Bank (0.3mn shares at LKR 261.00), Distilleries (0.2mn shares at LKR 242.00), Dialog Axiata (1.9mn at LKR 11.40), Commercial Bank (0.1mn at LKR 183.00) and the crossings accounted for 42% of the market turnover.

John Keells Holdings voting share and warrants, Sanasa Development Bank and Blue Diamond voting were among the mostly traded stocks of the day. Subsequent to the dividend announcement made yesterday, Sanasa Development Bank reached a 52-wk high of LKR 123.90 (+0.7%).

Continued robust foreign investor appetite was seen as foreign participation crossed 48% of the market activity. Foreign investors were net buyers for the seventh consecutive session with a net inflow of LKR 98mn. Net foreign inflows were mainly seen in John Keells Holdings (LKR 207mn), Nations Trust Bank (LKR 39mn) and Commercial Bank (LKR 12mn) while net outflow was mainly seen in Distilleries (LKR 76mn).

Asian Hotels and Properties declared an interim dividend of LKR 1.00 per share which translates to a dividend yield of 2%.

Lanka Securities Research