Colombo shares snapped the four-day losing streak and ended the weekly operations on positive note as the government made a move to shed light on the present political uncertainty.

The Cabinet approved the much debated 20th amendment to the constitution and as per the amendment, the number of seats in the parliament will be increased to 237 from 225 where 145 MPs from First-Past-the Post system while the rest consists of the Proportional Representation system and the national list. It’s anticipated that the Parliament would be dissolved after the 20th amendment is passed in the Parliament.

ASI erased early losses to close at 7,061.28 with a gain of 9.79 points (+0.1%) while S&P SL 20 index inclined  by 7.99 points (0.2%) to close at 3,914.01. Price appreciations in index-heavy John Keells Holdings (LKR 194.50,+2.1%), Hayleys (LKR 350.00,+6.1%) and Aitken Spence Hotels (LKR 79.60,+4.7%) supported the favorable index performance. The positive sentiment was reflected in the broad market where gainers surpassed losers 126 to 72 while 53 counters remained unchanged. The cash map improved to 68% from 48%.

The turnover reached 3-week high of LKR 1.6bn led by large-caps, predominantly the heavy foreign sales in premier blue-chip , John Keells Holdings. The counter recorded the highest turnover of LKR 584mn supported by negotiated deals of 2.9mn shares which changed hands at LKR 190-191.00. John Keells Holdings accounted for 37% of the market turnover.

Sampath Bank (LKR 163mn) and Peoples Leasing & Finance Co. (LKR 101mn) reported next best contributions to the turnover. Further several negotiated deals were reported in  Peoples Leasing & Finance Co (3.5mn shares at LKR 23.30), National Development Bank (0.26mn shares at LKR 259.00), HNB – nonvoting (0.12mn shares at LKR 173.00) and Sampath Bank (0.1mn shares at LKR 255.00). Crossings represented 47% of the total turnover.

Access Engineering was the most favored stock of the session. The counter touched a high of LKR 24.50 during the day but closed lower at LKR 24.10 with a change of +4.8%. Access Engineering share price rose approx. 13% during the week. Further investor interest was seen in Ceylon &  Foreign Trade (LKR 8.60,+4.9%), City Housing & Real estate (LKR 17.10,+13.3%), HVA foods (LKR 8.50,+9.0%). Subsequent to the listing of scrip dividend shares, Sanasa Development Bank shares were traded heavily and the counter closed at LKR 148.80 (+7.4%).

Alufab hit a fresh 52 week high of LKR 59.60 and closed lower at LKR 58.90(+1.7%) while On’ally Holdings reached a 52 week high of LKR 76.00 and closed at LKR 71.00 (+14.7%). 8 counters, including Ceylon Tobacco Co (LKR 910.00) touched 52 week low today. Shares of Ceylon Tobacco Co declined approx. 10% in past one month.

Foreign investors were net sellers of LKR 865mn worth of shares and accounted for 31% of the market activity. Net foreign outflows were seen in John Keells Holdings (LKR 578mn), Peoples Leasing & Co (LKR 96mn) and National Development Bank (LK 85mn) while net inflows were mainly seen in Sanasa Development Bank (LKR 22mn).

During the week the main index shed 61.45 points or –0.9% while S&P SL 20 index declined by 49.67 points or -1.3%. John Keells Holdings topped the weekly turnover list with LKR 854mn followed by Sampath Bank (LKR 549mn) and Access Engineering (LKR 159mn).

City Housing & Real estate (+29%), On’ally Holdings (+20%) and Access Engineering (+13%) were among top gainers for the week whilst Nation Lanka Finance (-14%), Ceylon Tobacco (-5%) and Seylan Bank – voting (-7%) were among top losers for the week.

Foreign investors were net sellers for the week with a net foreign outflow of LKR 841mn. Foreign participation was 25%. Net foreign outflows were seen in John Keells Holdings (LKR 583mn), National Development Bank (LKR 121mn) and Peoples Leasing & Finance Co (LKR 96mn) while net foreign inflows were seen in Laugfs Gas -voting (LKR 65mn) and Sampath Bank (LKR 64mn). Subsequent to the weekly outflows, year-to-date net foreign inflow declined to LKR 3.6bn.

The Colombo bourse is trading at a PE of 13.5x while RSI (14-day) is at 31.0.

(Courtesy: Lanka Securities Research)