Colombo bourse plunged on Tuesday erasing the post-budget gains as the indices witnessed a broad-based decline triggered by the sell-off in the banking stocks. All share index declined by 52 index points in latter part of the trading session but managed closed slightly above 7,000 mark to close at 7,009.99, down by 45.85 index points or 0.65% while 20-scrip S&P SL index dipped by 47.11index points (-1.25%) to end the session at 3,735.61.

Banking sector stocks were affected negatively from the budget 2016 and the sub-index fell 1.7% during the session. Among the banks, Commercial Bank (closed at LKR 145.90, -3.4%), Central Finance (closed at LKR 249.00, -6.0%), DFCC Bank (closed at LKR 161.20, -3.9%) and National Development Bank (closed at LKR 203.00, -3.2%) dropped to 52 week lows, dragging the indices to the negative zone. Further, People’s Leasing & Finance, Hatton National Bank, Lanka Orix Leasing, Sampath Bank, Seylan Bank, Nations Trust Bank and LB Finance were among losers in the banking and finance sector.

Daily market turnover was LKR 829mn. Commercial Bank topped the turnover list with LKR 166mn supported by a single crossing of 1.0mn shares at LKR 145.00. John Keells Holdings (LKR 132mn), Hatton National Bank (LKR 101mn) and Hemas Holdings (LKR 71mn) were among top contributors to the turnover.

Several crossings were recorded in Hemas Holdings (0.6mn shares at LKR 85.00), Nestle Lanka (0.02mn shares at LKR 2,100.00) and Ceylon Tobacco (0.02mn shares at LKR 1,000.00). Aggregate value of crossings accounted for 31% of the total turnover.

Market breadth was on negative territory where out of 216 counters, 118 declined, 49 advanced while 49 remained unchanged. Cash map further slipped from 42% to 25%. 03 counters reached 52wk high prices while 19 counters touched 52wk low price levels.

Cargills and Ceylon Cold Stores managed to continue the positive run, where both counters stepped to fresh 52wk high prices of LKR 193.50 & LKR 440.00 respectively. Meanwhile, investors booked profits in Softlogic Holdings, Textured Jersey and Access Engineering during the day.

Foreign investors were net sellers for the second consecutive day with a net foreign outflow of LKR 240mn. Foreign participation was 53%. Net foreign outflows were seen in Commercial Bank (LKR 177mn), Dialog (LKR 36mn), Hemas Holdings (LKR 31mn) while net foreign inflow was mainly seen in Hatton National Bank non-voting (LKR 22mn).

Meanwhile, at today’s Treasury bill auction, Treasury yields slid for the sixth consecutive week where one year T-bill yields declined by 1bps from 6.93% to 6.92% while 6 months yields slipped by 10bps from 6.50% to 6.40%. 3 months treasury bills were not offered. CBSL offered LKR 25bn worth of Treasury bills today and the auction was oversubscribed by 3.7 times with bids received amounting to LKR 91.9bn. It was decided to accept LKR 30.9bn worth of bills.

(Lanka Securities Research)