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CSE Highs and Lows

11 Sep 2021

By Madhusha Thavapalakumar  The week before last, the Colombo Stock Exchange (CSE) was breaking records and setting new milestones with the All Share Prices Index (ASPI) crossing 9,000 points, and daily turnover remaining over and well above Rs. 10 billion. Investors were eagerly anticipating the bullish market trend to continue, despite entering another week of lockdown.  However, the CSE’s growth momentum was lost by last Monday (6), with the ASPI closing on a red note, as it fell by 0.95%, while the turnover was well below Rs. 10 billion the daily average during the two weeks prior to this – at Rs. 7.7 billion. The day's session was deemed “volatile” by investors. The much-hyped-up Expolanka Holdings stocks contributed 29% to the turnover.  “The first half of the trading session reflected a rollercoaster ride, with the index plunging by 124 points to reach an intraday low of 9,193 due to profit-taking in selected counters, followed by a steep uptrend towards mid-session. However, the trend could not be sustained, as selling pressure gathered pace again and the market remained on a downward trajectory for the rest of the session,” First Capital said. The bearish trend persisted the next day as well. The ASPI plunged by 1.5% and the daily turnover was Rs. 8.7 billion, a growth of Rs. 1 billion from the previous day, yet below the weekly average level during the first two weeks of the current lockdown. Investors opined that the day's turnover was still healthy for a trading day that ended in red. The same day, the new Securities and Exchange Commission (SEC) Act was passed in Parliament without a vote, along with the widely spoken about Tax Amnesty Bill. By this point, there were reports that State Minister of Money and Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal would leave his ministerial portfolio and take up the role of Central Bank of Sri Lanka Governor. “The index hiked to an intraday high of 9,277 as soon as the session opened and started to take sideways, as investors urged to take profit in selected counters, leading the index to drop to an intraday low of 9,047. Afterwards, the index displayed a slight recovery and ended up closing at 9,093,” First Capital said. The next day, the ASPI recorded it's single largest drop in about seven months by falling 3.6%. This day was the fourth consecutive day the ASPI ended on a red note. Within these four days, the ASPI had declined by about 7%. Yet, the day's turnover managed to cross Rs. 10 billion and was recorded at Rs. 10.4 billion.  The market regained the next day, recording a 2.5% growth, and closed at 8,986. Yet, turnover fell to Rs. 5.8 billion, as a wait-and-see approach was adopted by institutional investors, according to reports. Contributors to the ASPI's gain after four days were Browns Investments, Commercial Leasing, LOLC Holdings, and Expolanka Holdings, which were also among top contributors to the previous day's ASPI plunge.The day witnessed a net foreign inflow of Rs. 105 million into Nestle. “The panic selloff seen over the last few sessions has made many fundamentally strong stocks more lucrative in the market due to attractive valuations justified by unchanged fundamentals coupled with an expected strong pickup in 3Q CY21 earnings,” Asia Securities said.  In the meantime, Expolanka continued its acquisition spree. In a CSE disclosure on 9 September, Expolanla stated that EFL Global Logistics (Pte.) Ltd. (Singapore), a fully owned subsidiary of Expolanka Holdings PLC (Expolanka), acquired 100% equity interest of Complete Transport System LLC for a purchase consideration of $ 6.1 million on 8 September. Complete Transport System LLC is a company incorporated in the US offering Bonded Container Freight Station and trucking services. The acquisition will enable EFL, the global logistics brand of Expolanka Holdings PLC, to strengthen and expand its service offering to its customers by providing value-added logistics, the company added.

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