Stock market gains on positive Budget

The Colombo stock market yesterday gained on account of a positive 2016 Budget though investors failed to sustain the rally.

“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,” Lanka Securities said.

“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,” it added.

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.

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

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

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

Lanka Securities said 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 Rs. 190.00, +8.6% while Ceylon Cold Stores closed at Rs. 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 Rs. 59 million. Foreign participation was 37%. Net foreign outflows were seen in Access Engineering (Rs. 165 million), John Keells Holdings (Rs. 12 million), National Development Bank (Rs. 3 million) while net foreign inflow was mainly seen in Ceylon Tobacco (Rs. 51 million).

Meanwhile, as per the Department of census and statistics, the newly introduced National Consumer Price Index (base year 2012/13) has recorded a YoY change of 3.0% in October compared to the 1.9% in September 2015.