Colombo bourse edged lower on Wednesday despite the unexpected drop in T-Bill yields. Political and economic policy uncertainties are weighing on the market sentiment as investors adopt a wait-and-see approach. The main index edged down to 7,043.90 with a loss of 13.10 points (-0.19%) while S&P SL 20 index dropped by 15.48 points or 0.38% to close at 4,013.82.

Today’s losses were mainly driven by price depreciations in counters such as Commercial Bank (closed at LKR 177.00, -1.1%), Ceylon Tobacco (closed at LKR 1,000.00, -1.0%) and Access Engineering (closed at LKR 24.50, -3.5%).

Daily market turnover was LKR 700mn. John Keells Holdings topped the turnover list with LKR 246mn underpinned by two crossings of 0.2mn shares at LKR 205.00 per share. Seylan Bank non-voting (LKR 142mn) and Laugfs Gas (LKR 37mn) recorded next best contributions to the turnover. Another crossing was recorded in Amana Bank where 6.1mn shares changed hands at LKR 5.10 per share. Total crossings accounted for 11% of the total market turnover.

Losers outweighed the gainers 89 to 78 while 56 counters remained unchanged. Cash map declined to 40% from 50%. 18 counters dropped to 52wk low prices while only Ceylinco Insurance non-voting share touched a 52wk high price level of LKR 649.90. However the counter closed lower at LKR 600.00, -6.2%.

Shares of Seylan Bank non-voting, Blue Diamond and John Keells Holdings were among heavily treaded counters.

Foreign investors continued to be net buyers for the twelfth consecutive session with a net inflow of LKR 204mn. Foreign participation was 40%. John Keells Holdings continued to be the most preferred share among the foreign investors and it recorded a net foreign inflow of LKR 194mn followed by Laugfs Gas non-voting (LKR 33mn) and National Development Bank (LKR 5mn) while net foreign outflow was mainly seen in Laugfs Gas (LKR 34mn).

Further National Development Bank announced that the company purchased 14.9mn ordinary voting shares of Seylan Bank PLC yesterday. This represents 8.45% of the total issued capital of Seylan Bank. Subsequent to the transaction NDB’s shareholding in Seylan Bank increased to 9.53% (16.8mn shares).

Meanwhile at today’s Treasury bill auction, T-Bill yields dropped notably where 12M yield declined by 38bps to 6.99% while 3M yield declined by 31bps to 6.79% and 6M yield declined by 44bps to 6.87%.

Lanka Securities Research