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Circuit-breakers take a break after World Bank news 

27 Apr 2022

 
  • CSE makes comeback after World Bank pledges $ 600 mn to SL
  • ASPI gains 375 points, S&P SL20 gains 230 points
  BY Shenal Fernando The Colombo Stock Exchange (CSE) experienced a sharp recovery yesterday (27) as the market reacted positively to the announcement of the $ 600 million financial assistance from the World Bank on Tuesday (26). Accordingly, the All-Share Price Index increased by 375.15 points (up 5.43%) to reach 7,280.52 points from the previous day’s close of 6,905.37. Similarly, the blue-chip S&P SL20 was up by 10.85%, reaching 2,356.71 points by market close, which is a 230.75 point increase compared to the previous day's close of 2,125.96 points.  This market rally yesterday came in the aftermath of two consecutive days where trading was halted due to the tripping of the CSE circuit breakers, following the over-10% decrease of the S&P SL20 index on both days.  The ASPI has been on a steep downward trend since late January 2022 after reaching its all-time high of 13,462.39 points on 19 January 2019. Following the close of market yesterday CSE market capitalisation stood at Rs. 3.2 trillion, down 41.9% Year-to-Date (YTD). The market yesterday was characterised by a healthy turnover of Rs. 2.2 billion, with around 144 .6 million shares traded. Prior to this week, the CSE was on a 17-day hiatus from 8 April 2022 due to New Year holidays and the temporary closure of the market by the SEC due to the prevalent economic crisis in the country. During this 17-day period, the Central Bank of Sri Lanka (CBSL), on the evening of 8 April after market close, announced a 700 basis point rate hike of the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) to 13.5% and 14.5%, respectively. Subsequently on 12 April, the Finance Minister announced the suspension of all foreign debt payments, pending an orderly and consensual restructuring of the debt. This was followed by rating downgrades by all three international rating agencies.


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