Colombo bourse continued the lackluster momentum for the tenth session in a row on Monday as the government flashed red light to another Chinese funded project, the lotus tower. The market start the weekly activities with negative results as benchmark ASI declined to 7,050.91 with a drop of 40.34 points (-0.57%) while S&P SL 20 index declined 12.56 points (-0.31%) to end at 4,035.41. Core index was in green territory with mere gain of 8 points at the beginning of the session but turned direction in the latter part of the session.

Today’s declines were mainly driven by counters such as Ceylinco Insurance (closed at LKR 1,500.10, -11.8%), John Keells Holdings (closed at LKR 205.00, -1%) and Nestle Lanka (closed at LKR 2,300.00, -0.9%).

Daily market turnover was LKR 583mn. After two consecutive sessions, several negotiated deals were recorded today in John Keells Holdings (0.3mn shares at LKR 205.00 per share) and Bogawantalawa Tea Estates (2.4mn shares at LKR 14.00 per share). Total crossings accounted for 16% of the market turnover.

John Keells Holdings positioned at the top of the turnover list with LKR 198mn followed by Expolanka (LKR 40mn) and Bogawantalawa Tea Estates (LKR 37mn).

Subsequent to today’s losses, the market RSI dropped below 30 levels or the oversold level to 29. Market capitalization fell below LKR 3,000bn mark to record LKR 2,989bn.

Losers surpassed the gainers 120 to 60 while 52 counters remained unchanged. Cash map marginally declined to 43% from 46% in the previous session. 22 counters dropped to 52wk low prices.

Shares of John Keells Holdings and both warrant 0022 & warrant 0023 attracted heavy investor preference during the session. Further Eastern Merchant, Lanka IOC and Bogawantalawa Tea Estates were among mostly traded counters.

According to a media article, Lanka IOC and Ceylon Petroleum Corporation have agreed to develop the upper oil tank farm of the China Bay installation in the Trincomalee, which will be carried out on mutually agreed terms. Lanka IOC closed at LKR 43.10, -4.2%.

Foreign investors continued to be net buyers for the tenth consecutive day with a net inflow of LKR 204mn. Foreign participation was 34%. Net foreign inflows were seen in John Keells Holdings (LKR 107mn), Expolanka (LKR 38mn) and Ceylon Investment (LKR 22mn) while net foreign outflow was mainly seen in Softlogic Holdings (LKR 8mn).

Meanwhile, Tokyo Cement announced that the amalgamation of Fuji Cement Company with Tokyo Cement Company was completed on 13th March 2015.

Further, Vallibel Finance will be issuing 7.5mn rated guaranteed subordinated redeemable debentures with an option to issue upto further 2.5mn debentures at a price of LKR 100.00 each. The subscription list will be opened on 26th March 2015 while the prospectus will be made available tomorrow.

Lanka Securities Research