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CSE Highs and Lows 

26 Jun 2022

By Shenal Fernando  While trading in the bourse continued to be lacklustre during the preceding week, the market was able to record slight gains, following weeks of bloodletting. However, such gains weren’t viewed with much enthusiasm by traders, who appeared to view this temporary recovery as a ‘dead cat bounce’ because Sri Lanka’s external conditions have not recovered, nor shown any signs of recovery. Therefore, despite the positive movement of the indices, market turnover continued to be low. Continuing fuel shortages together with increasingly negative news from the Government regarding the status of the economy played a key role in weighing down investor sentiment over the past few weeks. The same was observed during the preceding week as trading on the Colombo Stock Exchange (CSE) began the week in the red. Accordingly, on Monday (20), the benchmark All-Share Price Index (ASPI) initially fell by over 100 basis points within the first few minutes of market opening. Selling was observed across the board due to margin calls and panic selling. However, by the latter half of the trading session, several value stocks bounced back with the circulation of the news regarding Australian financial assistance and that the IMF team had arrived in Sri Lanka for the third round of discussions. Consequently, by the end of the day the ASPI was down by only 47.83 points (0.64%), reaching 7,424.56 points from the previous day’s close of 7,472.39 points. Since the rally observed in the latter half of the trading session was led by blue chip value stocks, the blue chip Standard & Poor’s Sri Lanka 20 (S&P SL20) index saw a sharper recovery and ended the day down by a mere 3.73 points (0.16%) at 2,364.92 points compared to the previous day’s close of 2,368.65 points. Market turnover for the day was down 33.5% at Rs. 822.7 million from the previous day’s turnover of Rs. 1.2 billion. The market began on Tuesday (21) on a positive note, with the ASPI surging by over 100 points within the first few minutes of market open before cooling down. Accordingly, the ASPI ended the day up by 77.72 points (1.05%) reaching 7,502.28 points compared to the previous day’s close of 7,424.56 points. A similar movement was observed in the S&P SL20 index which was up 35.65 points (1.5%) reaching 2,400.57 points from the previous day’s close of 2,364.92 points. Despite the positive movement observed in the CSE, market turnover for the day was a mere Rs. 760 million and Expolanka Holdings PLC (EXPO) accounted for 28% of the turnover. The main contributors to the positive movement of the ASPI on Tuesday were EXPO which contributed 12.7 points, followed by Dialog PLC (DIAL) with 6.9 points, DFCC Bank PLC (DFCC) with 6.6 points, and Commercial Bank PLC (COMB) with 3.8 points. Keeping with the positive trend observed on Tuesday the ASPI surged by over 75 points within the first few minutes of market open on Wednesday (22). However, with the circulation of the news that a holder of Sri Lanka’s 5.678% International Sovereign Bonds (ISBs) due on 25 July 2022 had instituted litigation against the country for breach of contract due to default, the market started trending south. Consequently, the ASPI ended the day up by only 9.87 points (0.13%), reaching 7,512.15 points from the previous day’s close of 7,502.28 points. A similar movement was observed in the S&P SL20 index which ended the day up by only 9.24 points reaching 2,409.81 points from the previous day’s close 2,400.57 points. Furthermore, market turnover continued to be low at around Rs. 690 million, with around 37.5 million shares traded.   On Thursday (23) the CSE continued its recent positive trend as the ASPI surged by over 43.94 points (1.64%) reaching 7,556.09 points from the previous day’s close of 7,512.15 points. Similarly the S&P SL20 index ended the day up by 39.48 points (1.64%) reaching 2,449.29 points from the previous day’s close of 2,409.81. Market turnover saw a significant improvement during the day, increasing to Rs. 1.1 billion with over 43.7 million shares traded, with trading in EXPO accounting for over 35% of the market turnover.  


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