Political uncertainties pushed the equities market deep into the red on Monday as ASI witnessed the highest intra-day drop in 15 months. The index lost 226.31 index points (3.1%) in the morning session but recovered during the latter half and closed at 7,235.25 shedding 166.37 index points or 2.25%. 20-scrip S&P SL index slipped by 82.32 index points or 1.99% to close at 4,044.94. During the last two sessions ASI slipped by 295.08 index points (-3.9%) while S&P SL20 index declined by (-3.6%). With this decline, market PE dropped from 14.7x to 14.1x within last two days.

Price declines in counters such as John Keells Holdings (closed at LKR 249.00, -1.7%), Carson Cumberbatch (closed at LKR 426.20, -5.3%), Dialog Axiata (closed at LKR 12.60, -3.1%) and Nestle Lanka (closed at LKR 2,111.00, -2.1%) affected the index performance.

Daily market turnover was LKR 1.7bn. Laugfs Gas topped the turnover list with LKR 391mn underpinned by single crossing of 8.8mn shares at LKR 43.00. The crossing represented 22% of the total turnover. Access Engineering and People’s Leasing & Finance were the next best contributors the turnover with LKR 85mn & LKR 56mn respectively.

Further, 0.3mn shares of Hemas Holdings changed hands in a single crossing at a price of LKR 73.00. Aggregate value of crossings represented 24% of the total turnover.

Out of 280 counters, 235 declined, 20 advanced while 25 remained unchanged. Cash map marginally inclined to 39% from 34%. 16 counters touched 52wk low price levels.

Subsequent to the listing of new shares from the rights issue, Acme Printing & Packaging, counter declined to LKR 11.20 during the day but managed to close at LKR 11.90 (-4.8%).

Shares of Access Engineering, People’s Leasing & Finance and Union Bank were traded heavily during the session.

Most of the banking sector counters except Amana Bank declined during today’s trading session. Amana Bank closed at LKR 5.00 without a change. Price declines were recorded in National Development Bank (closed at LKR 250.00, -0.6%), Hatton National Bank (closed at LKR 193.00, -3.0%), Commercial Bank (closed at LKR 167.10, -4.5%), DFCC Bank (closed at LKR 215.00, -2.7%), Sampath Bank (closed at LKR 233.00, -0.6%), Nations Trust (closed at LKR 94.00, -1.9%), HDFC Bank (closed at LKR 65.10, -4.8%), Union Bank (closed at LKR 24.80, -4.3%), Sanasa Development Bank (closed at LKR 90.00, -2.0%), Seylan Bank (closed at LKR 94.00, -2.1%) and Pan Asia Bank (closed at LKR 23.50, -6.0%).

Foreign investors closed as net buyers for thirteen days in a row with a net inflow of LKR 100mn worth of equities. Foreign participation was 7%. Net foreign inflows were seen in Hemas Holdings (LKR 41mn), Commercial Bank (LKR 24mn), Sampath Bank (LKR 20mn) while net foreign outflow was mainly seen in People’s Leasing & Finance (LKR 5mn).

Lanka Securities Research