CSE Highs and Lows
8 months ago
By Shenal Fernando The Colombo Stock Exchange (CSE) continued its downward trend during the week as investor sentiment continued to be affected by the negative outlook on the country’s economy and the announcement of tax hikes by the Government. Trading on the bourse on Monday (30) initially commenced on a positive note, surging by over 100 points within the first few minutes largely due to gains observed in the LOLC Group companies. However, this early momentum faded by 11.00 a.m. due to the emergence of selling pressure across the board, as the realisation of gloomy economic conditions appeared to continue to weigh down investor sentiments. Accordingly, the benchmark All-Share Price Index (ASPI) closed the day down by 84.22 points (1.01%), reaching 8,231.33 points compared to the previous day’s close of 8,315.55. Similar movement was observed in the Standard & Poor’s Sri Lanka 20 (S&P SL20) index which was down 13.96 points (0.51%) during the day, falling to 2,719.08 points from the previous day’s close of 2,733.04 points. Turnover for the day was down 11% at Rs. 1.4 billion, compared to the turnover of Rs. 1.6 billion observed during the previous day. The off-board deal on Hatton National Bank PLC (HNB) contributed Rs. 120 million or 8.6% of the total turnover of the day. A net foreign inflow of Rs. 91.9 billion was observed during the day, after three consecutive market sessions of foreign outflows. The CSE’s downward trend continued on Tuesday (31), as negative investor sentiment and the announcement of tax hikes pushed the market down. It was announced in the morning that the Cabinet of Ministers had approved a proposal submitted by Prime Minister Ranil Wickremesinghe in his capacity as Finance Minister to increase several taxes. Accordingly, it was announced that the standard Corporate Income Tax rate would be increased to 30% from 24% from 1 October 2022 onwards, upon the amendment of the Inland Revenue Act No. 24 of 2017. Consequently, the ASPI fell by around 123.24 points (1.5%) during the day, reaching 8,108.09 points by market close from the previous day’s close of 2,231.33 points. Similarly, the S&P SL20 index was down by 39.75 points (1.46%), reaching 2,679.33 points by market close compared to the previous day’s close of 2,719.08 points. Despite the publishing of attractive earnings of several value stocks during the day, the bears continued to dominate as selling pressure was observed across the board, with 119 counters down and only 58 counters up during the trading session. Turnover for the day was up 16.3% compared to the previous day, at Rs, 1.6 billion, with over 105.3 million shares traded. The off-board deal on Commercial Bank PLC (COMB) and John Keells Holdings PLC (JKH) contributed around Rs. 51.8 million or 3.2% of the turnover. A net foreign inflow of around Rs. 66.6 billion was observed for the second consecutive trading session. On Wednesday (1) the market commenced trading on a positive note on the back of gains observed in LOLC Group counters following the release of attractive earnings. However, this early momentum faded as negative sentiments pushed the market south. Accordingly, the ASPI was down by 43.4 points (0.54%) during the day, falling to 8,064.69 points by market close from the previous day’s close of 8,108.09 points. A similar movement was observed in the S&P SL20 index, which was down 23.95 points (0.89%), reaching 2,655.38 points by market close compared to the previous day’s close of 2,679.33 points. Turnover for the day was at Rs. 1.2 billion, with over 77 million shares traded. A net foreign inflow was observed for the third consecutive trading session of around Rs. 20.3 billion. A trend reversal in the CSE was observed on Thursday (2) as the ASPI surged by around 100 points during the first 30 minutes of the trading session, before settling at around 8,099.51 points by market close, up 34.82 points (0.43%) compared to the previous day’s close of 8,064.69 points. A similar movement was observed in the S&P SL20 index, which was up 16.34 points (0.62%) during the day, reaching 2,671.72 points by market close compared to the previous day’s close of 2,655.38 points. Market turnover was at Rs. 1.4 billion with over 67.7 million shares traded.