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Colombo bourse welcomed the budget proposals optimistically on Monday along with higher investor activity. Investor sentiment moved to positive territory on favorable budget proposals on capital market and its listed entities.

Benchmark index gained 55 index points within minutes of opening the session but failed to continue the momentum and closed the session at 7,055.84 with an increase of 38.40 index points or 0.55%. S&P SL20 index bagged 8.61 index points or 0.23% to end at 3,782.72.

Index performance was driven by high caps namely, Nestle Lanka (closed at LKR 2,090.00, +3.2%), John Keells Holdings (closed at LKR 189.00, +1.7%) and Cargills (closed at LKR 190.00, +8.6%).

Daily market turnover was LKR 885mn. Access Engineering topped the turnover list with LKR 186mn underpinned by two crossings of 2.5mn shares at LKR 24.00. Bogala Graphite was the next best contributor to the turnover with LKR 157mn supported by a single off-the floor dealing of 4.9mn shares which changed hands at LKR 32.00.

Hatton National Bank (LKR 53mn), Ceylon Tobacco (LKR 52mn) and John Keells Holdings (LKR 44mn) were among the top contributors to the turnover. Two crossings were recorded in Ceylon Tobacco (0.04mn shares at LKR 990.00-1,000.00) and accordingly crossings accounted for 30% of the total turnover.

Investor sentiment was on positive territory where out of 235 counters traded, 123 advanced, 67 slipped and 45 counters remained. However, cash map declined from 64% to 42%. 8 counters managed to advance to 52wk high prices while 14 counters touched 52wk low price levels.

Subsequent to the favorable budget proposals for the construction industry, counters namely, Access Engineering, Central Industries, Tokyo Cement and Alumex attracted high investor attention. Further, proposals such as removal of value added tax for retail and wholesale trade boosted the share prices of Cargills and Ceylon Cold Stores. Cargills touched a 52wk high price of LKR 190.00, +8.6% while Ceylon Cold Stores closed at LKR 420.00, +3.7%.

High cap banks such as Commercial Bank, Hatton National Bank, Sampath Bank, National Development Bank and Seylan Bank closed the session with losses amid the negative implications of the budget.  Nevertheless, positives from budget turned the investor attention towards finance companies.

Prices of in Royal Ceramic, Lanka Tiles, Lanka Ceramic and Lanka Walltiles declined following the reduction of import duties of tiles and sanitary ware. All four counters declined by more than 6% during the session.

Foreign investors closed the session on selling side with a net foreign outflow of LKR 59mn. Foreign participation was 37%. Net foreign outflows were seen in Access Engineering (LKR 165mn), John Keells Holdings (LKR 12mn), National Development Bank (LKR 3mn) while net foreign inflow was mainly seen in Ceylon Tobacco (LKR 51mn).

(Lanka Securities Research)