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CSE recovers but foreigners keep fleeing

14 May 2020

Both the All Share Price Index (ASPI) and the S&P SL20 Index of the Colombo Stock Exchange (CSE) ended in the green after a two-day fall yesterday (13), but foreigners continued to exit the market in droves. The ASPI gained 119.30 points or 2.81% to close on 4,367.25 points while the S&P, which contains the 20 largest listed companies, ended on 1,729.15 points having gained 43.70 points or 2.59%. Furthermore, this was the first day of the week in which the CSE’s new circuit breaker system was not triggered, as it had closed the market within a minute on Monday (11), making it the shortest trading day in CSE history, and halted the market for 30 minutes on Tuesday (12).  Despite the good news from the overall market point of view, the foreign outflows will be a cause for concern for many, with foreigners selling stocks worth Rs. 664 million and purchasing only Rs. 334 million, leading to a net outflow of over Rs. 329 million. Commercial Bank witnessed the highest net foreign outflow of Rs. 143 million, while the highest net foreign inflow was for Lion Brewery amounting to Rs. 11.2 million. Domestic investors made purchases worth over Rs. 643 million and sold stocks worth over Rs. 314 million. This Rs. 329 million, added to yesterday’s net outflow of Rs. 114 million, brings the week’s net outflow to Rs. 433 million, even after the Rs. 600,000 minor net foreign inflow of Monday’s fleeting trading day is factored in. This is already closing in on the total net outflow of the five market days leading up to the seven-week closure of the market on 20 March, when the Covid-19 panic was at its height with the first couple of Sri Lankan Covid-19 cases being discovered. The CSE suffered a net foreign outflow of Rs. 473 million in the five-and-a-half days the market was open. However, the CSE gained Rs. 56 billion value, showing signs of recovery after having had over Rs. 150 billion wiped out in the first two days. The day’s turnover was down from over Rs. 3.6 billion on Tuesday to Rs. 978 million yesterday.


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