Colombo stock market started the budget week on negative note where benchmark index slide back to 6,900 mark amid the concerns on budget proposals and mixed interim results. All share index closed the session on 18 week low of 6,965.98, down by 35.83 index points (-0.51%) while 20-scrip S&P SL index shed 27.74 index points (-0.73%) to close at 3,759.26.

Illiquid high cap, Bukit Darah (closed at LKR 505.00, -9.8%) drove the index performance to red zone along with Sri Lanka Telecom (closed at LKR 47.30, -4.3%) and Hemas Holdings (closed at LKR 84.60). All three counters witnessed drop in profits for the September quarter. As per the 250 earnings reports released so far of  companies representing approximately 98% of the market cap, the September quarter earnings have declined by 3.8%YoY.

Daily market turnover was LKR 678mn. Dialog Axiata emerged as the top contributor to the turnover with LKR 174mn followed by Hayleys (LKR 69mn), Commercial Bank (LKR 51mn), Hatton National Bank (LKR 38mn). Two crossings were record in Hayleys (0.2mn shares at LKR 320.00) and Commercial Bank (0.2mn shares at LKR 145.50) and aggregate value of crossings represented 14% of the total turnover.

Investor sentiments were on negative side where out of 237 counters, 113 declined, 66 advanced while 58 counters remained unchanged. Cash map slipped from 45% to 26%. 04 scripts reached 52wk high prices while 33 counters touched 52wk low price levels.

Ceylon Grain Elevators, Lanka Hospitals and Central Industries were among heavily traded counters. Further, banks such as Commercial Bank (LKR 150.00), DFCC Bank (LKR 166.00) and Amana Bank (LKR 4.80) touched 52wk low price levels. Scripts namely Carson Cumberbatch (LKR 361.00), Ceylon Guardian Investment (LKR 170.00), Ceylon Invesment (LKR 83.20) and Tokyo Cement (LKR 47.00) declined to a fresh 52wk low price levels, subsequent to the negative profit reports.

Meanwhile, as per the announcement, United Hotels Company (Pvt) Ltd, a subsidiary of Ceylon Hotels Corporation (CHOT) has decided to acquire entire shareholding of Ceylon Hotels Maldives (Pvt) Ltd for a sum of LKR 0.7mn to  develop a resort with a 50 rooms and total construction cost of resort will be USD 27.7mn. However, stock of the company closed with flat returns at LKR 24.20.

Foreign investors were net buyers for the session with a net foreign inflow of LKR 63mn. Foreign participation was 35%. Net foreign inflows were seen in Hatton National Bank (LKR 24mn), Ceylon Tobacco (LKR 23mn), John Keells Holdings (LKR 20mn) while net foreign outflow was mainly seen in Commercial Bank (LKR 13mn).

(Lanka Securities Research)