Colombo Bourse Records 7-week High

Colombo bourse closed the week with an eventful trading session on Friday in contrast to the unenthusiastic trading seen during the rest of the week. Main index managed to gain 24.25 index points (+0.35%) after two consecutive sessions of losses to close at 7,007.05 while 20-scrip S&P SL advanced by 21.10 index points or 0.54% to end at 3,914.98.

High caps such as Lion Brewery (closed at LKR 650.00, +29.8%), Chevron Lubricants (closed at LKR 379.50, +9.5%), Ceylon Tobacco Company (closed at LKR 895.00, +5.0%) and John Keells Holdings (closed at LKR 182.00, +3.6%) pushed index performance to positive territory.

Daily market turnover crossed LKR 2bn mark to record a 7 week high of LKR 2.5bn where 78% of the total turnover was fueled by the hefty crossings recorded in Textured Jersey. Counter emerged as top contributor to the turnover with LKR 1.9bn underpinned by several crossings of 67.4mn shares at LKR 26.80. Market volume increased to a two week high of 96mn.

Further People’s Merchant Finance, Seylan Bank and John Keells Holdings were next best contributors to the turnover with LKR 143mn, LKR 124mn and LKR 56mn respectively. Single crossing was recorded in Seylan Bank (1.0mn shares at LKR 100.00).

Reflecting optimistic investor sentiment, gainers surpassed losers 124 to 64, while 50 counters remained unvaried. Cash map stepped up to 52% from 37%. 14 counters touched 52wk low prices while only Serendib Hotels managed to reach all time high price of LKR 37.90. Stock closed at LKR 36.00 (+2.9%).

Subsequent to the right issue announcement of the Waskaduwa Beach Resort, investors gathered around Citrus hotel counters where all four counters witnessed positive returns. Waskaduwa Beach Resort closed higher at LKR 7.20 (+35.9%) while Hikkaduwa Beach Resort and Kalpitiya Beach Resort advanced to LKR 18.20 (+7.1%) and LKR 3.80 (+22.9%) respectively. Waskaduwa Beach Resort intends to raise LKR 778mn through an issue of 77.8mn shares at LKR 10.00 per share to retire existing debt. Moreover, the ultimate parent of the three hotels, Citrus Leisure, increased by 8.3% to LKR 13.00.

Further, Textured Jersey, Access Engineering and Lanka IOC were among heavily traded counters. Dialog Axiata recorded a fresh 52wk low price of LKR 10.30 but closed higher at LKR 10.50 (+1.0%).

Following the sub-division of shares, John Keells Holding commenced trading today after three days of dealing suspension. All three counters of John Keells Holdings advanced during the session. Main share advanced to LKR 184.80 but closed lower while Warrant 0022 and 0023 increased by 3.2% and 5.6% to closed at LKR 19.60 and LKR 33.00 respectively.

Foreign investors were net sellers for the third consecutive session with a net outflow of LKR 430mn. Foreign participation notably increased to 66%. Net foreign outflows were seen in Textured Jersey (LKR 441mn), Seylan Bank (LKR 10mn), Softlogic Holdings (LKR 4mn) while net foreign inflow was mainly seen in Three Acre Farms (LKR 6mn).

During the week the main index shed 9.15 points or -0.13% while S&P SL 20 index gained by 14.39 points or +0.37%. Textured Jersey topped the weekly turnover list with LKR 1.9bn followed by Commercial Bank (LKR 227mn) and People’s Merchant Finance (LKR 147mn). Subsequent to the decline, market PE reduced to 13.3x from 13.4x while RSI (14-day) is at 36.0.

Waskaduwa Beach Resort (+36%), Kalpitiya Beach Resort (+27%) and Access Engineering (+6%) were among top gainers for the week whilst Anilana Hotels and Properties (-8%), Nation Lanka Finance (-7%), Laxapana Batteries (-5%) were among top losers for the week.

Foreign investors were net sellers for the week with a net foreign outflow of LKR 503mn. Foreign participation was 50%. Net foreign outflows were seen in Textured Jersey (LKR 432mn), Commercial Bank (LKR 131mn), People’s Leasing & Finance (LKR 66mn) while net foreign inflows were seen in Laugfs Gas (LKR 76mn), Ceylon Investment (LKR 25mn) and Commercial Credit & Finance (LKR 19mn). Subsequent to the weekly outflows, year-to-date net foreign inflow declined to LKR 1.3bn.

Meanwhile at Treasury bill auction, yields of 3M and 6M declined by 3bps each to 6.11% and 6.21% respectively. 12M yield remained unchanged 6.28%. CBSL offered LKR 20bn worth of Treasury bills and the auction was oversubscribed by 2.4 times with bids received amounting to LKR 47.9bn. It was decided to accept LKR 19.1bn.