Colombo equities concluded the weekly activities on an optimistic note as investors reacted to positive corporate earnings and attractive dividends declared in high cap counters. Main index gained 8.74 points (+0.12%) to end at 7,314.91 while S&P SL 20 index gained 19.67 (+0.48%) to end at 4,133.01.

Today’s gains were fuelled by counters such as Nestle Lanka (closed at LKR 2,370.00, +2.6%), Distilleries (closed at LKR 238.00, +2.5%) and Shalimar Malay (closed at LKR 2,375.00, +8.7%).

Daily market turnover crossed the LKR 1bn mark for the second consecutive day to record LKR 1.1bn. John Keells Holdings positioned at the top of the turnover list with LKR 147mn followed by National Development Bank (LKR 115mn) and Sampath Bank (LKR 104mn).

Several negotiated deals were recorded in National Development Bank (0.3mn shares at LKR 255.00 per share) and Hatton National Bank non-voting (0.1mn shares at LKR 180.00 per share). Aggregate value of crossings represented 8% of the market turnover.

Losers surpassed the gainers 102 to 82 while 65 counters remained unchanged. 07 counters reached 52wk high prices and 07 counters dropped to 52wk low prices. Cash map declined to 50% from 64%.

Shares of Nation Lank Finance, Sanasa Development Bank and Eastern Merchant attracted heavy investor preference during the session. Further, shares of Ascot Holding were traded heavily today subsequent to the listing of right shares. The counter closed at LKR 50.50, -1%.

The 4Q earnings season is nearing the end and out of 294 listed companies, aprox 237 companies, which represent 80% of market cap, have released their earnings. Accordingly, the aggregate corporate earnings for the 4QFY2014 has inclined by 7%YoY. Nonetheless aprox 57 companies, including several high cap banks are yet to release the quarter earnings.

Sampath Bank (SAMP) reached a 52wk high price of LKR 270.10 today subsequent to the favorable 4Q earnings and attractive dividends. The bank reported a profit growth of 23% for the latest quarter and declared a first and final dividend of LKR 5.00 per share (DY 2%) along with a scrip dividend of 01 for 38 shares. Adjusted to the script, SAMP has declared approx. LKR 12.00 based on yesterday’s closing price of LKR 260.80. SAMP declared LKR 8.00 dividend in FY2013. The counter closed at LKR 269.00, +3.1%.

Moreover Nestle Lanka (NEST) released the December quarter earning which showed a drop in profits of 13%YoY. The counter also declared a final of LKR 28.00 per share (DY 2%) and second interim dividend of LKR 28.50 per share. Despite the unfavorable results the counter advanced by +3.5% to LKR 2,390.00 during the session. NEST has declared a total of LKR 68.50 for FY2014 compared to LKR 60.00 dividend declared in FY2013.

Further, Hatton National Bank declared the final dividend of LKR 7.00 per share (DY 3%). Including the final dividend, HNB has declared a total dividend of LKR 8.50 per share in FY2014.

Meanwhile, Hemas Holdings announced that the company is planning to raise LKR 4.1bn via a right issue of 57mn shares, with the proportion of 01 for 09 at LKR 72.00 per share. The company intended to utilize the funds to pursue strategic investment opportunities in the core sectors of the group.

Foreign investors were net sellers for the third consecutive day with net outflow of LKR 57mn. Foreign participation was 16%. Net foreign outflows were seen in Hatton National Bank (LKR 44mn), Hatton National Bank non-voting (LKR 28mn) and John Keells Holdings (LKR 27mn) while net foreign inflow was mainly seen in Aitken Spence (LKR 20mn). With todays’ outflows, the year to date foreign inflow declined to LKR 1.3bn.

Meanwhile, The market took opposite directions for the week as ASI lost 20.60 points or -0.28% while S&P SL 20 index gained 19.82 or +0.48%. Commercial Bank emerged as the top contributor to the weekly turnover with LKR 755mn followed by John Keells Holdings (LKR 708mn) and Hatton National Bank (LKR 312mn).

Eastern Merchant emerged as the top gainer for the week following the announcement on sale of the land and buildings. Further Lanka Aluminium and Lighthouse Hotel were among top gainers. Entrust Securities, Tokyo Cement and Ascot Holdings were top losers of the week.

Foreign investors were net sellers for the week with net outflow of LKR 279mn. Foreign participation was 33%. Net foreign outflows were seen in Commercial Bank (LKR 311mn), Hatton National Bank non-voting (LKR 76mn) and Hatton National Bank (LKR 29mn) while net foreign inflow was mainly seen in Access Engineering (LKR 33mn).

At the weekly T-bill auction held last Wednesday, the 12 month T-bill yield further increased by 2bps to 6.12% while 3 month and 6 month T-bill yields increased by 6bps and 5bps to 5.94% and 6.03% respectively.

Lanka Securities Research