Colombo Stock Exchange Market Review – 22nd Nov 2016

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Colombo Stock Exchange Trade Summary 22-Nov-2016

Colombo equities edged lower for the seventh straight session despite the improvement in activity levels. ASI closed at a 4-month low of 6,255.98 down by 19.28 index points (-0.3%). S&P SL 20 index fell 12.65 index points (0.4%) to 3,473.65.

Blue-chips such as Nestle Lanka (LKR 2,050.00,+1.9%), Ceylon Tobacco (LKR 879.90,+1.1%), Ceylon Cold Stores (LKR 734.20,+1.9%) and John Keells Holdings (LKR 145.00,+0.5%) gained grounds in today’s session. However the price depreciations in Dialog Axiata (LKR 10.40,-1.9%), Textured Jersey (LKR 42.00,-3.5%) and LOLC (LKR 76.00,-2.6%) dragged the index to the negative territory.

Market turnover touched one-month high of LKR 649mn supported by the trades in John Keells Holdings (LKR 165mn), Nestle Lanka (LKR 96mn) and Ceylon Tobacco (LKR 50mn). Two crossings were seen in John Keells Holdings (0.15mn at LKR 145.00) and Cargills Ceylon (0.2mn shares at LKR 174.00) and the crossings accounted for 9% of the turnover.

Textured Jersey and Access Engineering (LKR 23.80,-1.7%) were the most traded stocks today. Further, relatively high activity was seen in Chevron Lubricants Lanka and John Keells Holdings.

Foreign investors were net sellers with net foreign outflow of LKR 9mn. Foreign participation accounted for 46% of the market activity. Top net outflows were seen in John Keells Holdings (LKR 63mn), Sampath Bank (LKR 22mn) and Access Engineering (LKR 10mn) while top net inflow was mainly seen in Nestle Lanka (LKR 47mn).
Source: LSL

Sri Lankan shares fall for 7th session; tax proposals weigh on mkt

Reuters: Sri Lankan shares extended their falls into a seventh session on Tuesday, posting their lowest close since July 4, as investor sentiment was hit by budget tax proposals, including revisions in corporate and withholding taxes.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees (then $12.35 billion) year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The benchmark index of the Colombo Stock Exchange ended down 0.31 percent, or 19.28 points, at 6,255.98. It has declined 2.57 percent over the past seven sessions after the budget was presented on Nov. 10.

The index was in oversold territory, with the 14-day relative strength index at 16.929 versus Monday's 18.405, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

"Investors stayed on the sidelines while the economy is getting squeezed and earnings are taking a hit," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

The market was also hit by continued foreign investor selling following Donald Trump's win in U.S. president election, he added.

The market shrugged off a move by the Securities and Exchange Commission to change the minimum floating rule to raise market liquidity.

Foreign investors sold a net 8.76 million rupees ($59,189.19) of shares on Tuesday, extending the year-to-date net foreign outflow to 1.16 billion rupees of shares.

Analysts said the increase in various taxes and fees would reduce the disposable income of people and challenge the consumption-led growth.

Turnover was 649 million rupees, less than this year's daily average of 700.6 million rupees.

Shares of DFCC Bank Plc fell 1.64 percent, while Lanka ORIX Leasing Company Plc declined 2.56 percent. 

($1 = 148.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)