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CSE Highs and Lows

4 months ago

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By Shenal Fernando   The movement of the Colombo bourse remained largely sporadic, with profit-taking being observed as investors took a cautious approach following the recent bull run owing to the prevailing challenging macroeconomic conditions in the country. The Colombo Stock Exchange (CSE) appears to have turned a corner following its collapse earlier this year and has been on an uptrend since mid-July 2022, following the resignation of President Gotabaya Rajapaksa and the subsequent lull in public protests. Market sentiment, particularly in the aftermath of the passing of the 2022 interim Budget on 30 August and the subsequent signing of the Staff-Level Agreement with the International Monetary Fund (IMF) has been positive, as there is finally a clear sign that Sri Lanka has a recovery plan. The All Share Price Index (ASPI) gained 39.8% from 7,091.29 points on 8 July 2022, reaching 9,913.22 points on Wednesday (21) due to the political stability achieved and positive policy decisions made by President Ranil Wickremesinghe. However, the performance of the CSE during last week was largely subdued due to cautious investor activity which appeared cognisant of the issues within the economy with no proper solution in sight. The market turned red on Monday (19) due to profit-taking amidst worries over the sovereign debt restructuring process. Accordingly, the benchmark ASPI constricted by around 35.69 points (0.35%) to reach 10,025.40 points, compared to the previous day’s close of 10,061.09 points. A similar movement was observed in the blue chip Standard & Poor’s Sri Lanka 20 (S&P SL20) index, which ended the day down 19.58 points (0.60%), reaching 3,217.74 points from the previous day’s close of 3,237.32 points. Daily turnover was down by 36.7% at Rs. 3.3 billion, with over 103 million shares traded compared to the previous day’s Rs. 5.3 billion. The market fell again on Tuesday (20) due to cautious investor activity, triggering profit-taking across the board. However, Lanka IOC PLC (LIOC) continued its strong performance and Expolanka Holdings PLC (EXPO) continued to see increased foreign interest which absorbed selling pressure and contributed 46% of the daily market turnover. The ASPI fell by 124.27 points ending the day at 9,901.13 points, down 1.24% compared to the previous day’s close of 10,025.40 points. Similarly, the S&P SL20 index ended the day down 32.15 points (1.00%), reaching 3,185.59 points from the previous day’s close of 3,217.74 points. Daily turnover was up by 81.5% at Rs. 6 billion, with over 124 million shares traded compared to the previous day’s turnover of Rs. 3.3 billion. The market turned bullish once again on Wednesday (21) despite continuing profit-taking due to ongoing foreign purchasing in the case of EXPO boosting market turnover. Accordingly, the ASPI gained 12.09 points during the day, reaching 9,913.22 points (up 0.12%) compared to the previous day’s close of 9,749.09 points. The S&P SL20 index was also up by 14.35 points (0.45%) during the day, reaching 3,199.94 points by market close from the previous day’s close of 3,185.59 points. Daily turnover fell by 23.7% to Rs. 4.6 billion, with over 112 million shares traded compared to the previous day’s turnover of Rs. 6.1 billion. A net foreign inflow of Rs. 990.4 million was recorded during the day.        

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