CSE highs and lows

By Madhusha Thavapalakumar

The Colombo Stock Exchange (CSE) continued its growth momentum, and on Friday, 27 August, it set new records with the All Share Price Index (ASPI) crossing the 8,900 mark once again, registering a turnover of about Rs. 16 billion. Investors, delighted, started Twitter polls in anticipation of predicting which share price is going to go up when CSE opens for another trading week on Monday (30).

However, Monday had its own plans and CSE experienced technical issues. Several investors complained that online facilities of 10 brokers did not work for quite some time, which has reportedly resulted in loss of time and opportunity for those firms and investors. At the end of the day, CSE issued a statement requesting a root cause analysis from the system provider, Iron One Technologies (Pvt.) Ltd., regarding the disruption to the order management system provided to four stockbroker firms during trading, which resulted in trading difficulties to clients of these firms.

“System providers are an integral element of a technologically driven, smoothly functioning capital market, especially in the perspective of investor accessibility. The CSE, therefore, stresses the importance of system providers taking all possible proactive and preventative measures to provide seamless services and access to investors,” CSE said in a statement.

“The exchange did not view completely limiting market access to local and international investors via a trading halt as a viable response to system difficulties faced by one system provider,” it further said.

As a result, and as you might have guessed it, CSE lost its momentum that day. Nevertheless, the volume of shares traded that day was 650 million and the turnover was Rs. 13 billion. In the meantime, LOLC Holdings’ share price exceeded Rs. 600 per share, once again retaining the “Most Valued Listed Company” status at the CSE.

Then came Tuesday (31); yet, investors were seen complaining about the same technical issues which were reportedly sorted to a certain extent. But investors were still unable to view certain areas. Provoked by this, investors went on to tag CSE social media handles, requesting them to solve the issue as soon as possible. Nevertheless, the ASPI closed a little lower than 9,000, somewhat regaining its growth momentum that was lost the day before amidst a chaotic technical issue, and the turnover was Rs. 10.8 billion.

The battle between both LOLC Holdings and Expolanka Holdings to become the Most Valued Listed Company at CSE continued as Expolanka, once again, overtook LOLC and became the Most Valuable Listed Company on Tuesday. With company share prices reaching Rs. 167.50 on the same day compared to a mere Rs. 5 a year ago, Expolanka alone witnessed a trade of about Rs. 5 billion with over 30 million shares changing hands.

Meanwhile, on the same day, the Sri Lankan rupee hit a record low of Rs. 204.99 against the US dollar, even amidst a background where the US dollar was globally on a weakening swing. However, the same day also witnessed US dollar inflows of about $ 1.2 billion to the country’s gross official reserves. The International Monetary Fund’s (IMF) Special Drawing Rights (SDR) of $ 787 million reached Sri Lanka, while the first tranche of Sri Lanka’s swap deal with Bangladesh Bank (the country’s Central Bank) was also received, which amounted to $ 150 million. Also, another RMB 2 billion loan was obtained from China Development Bank (CDB). If converted, the CDB loan values $ 300 million. Reportedly, this boosted some confidence among investors.

Wednesday (1), the first trading day of September, was a joy for investors with ASPI finally crossing the 9,000 mark, closing at 9,161.13, and a whopping turnover of Rs. 14.6 billion was reported while the share volume was 484.16 million. This time, Expolanka, together with Browns Investments PLC, LOLC Holdings, Hayleys PLC, and Valibel One, contributed to the hike in ASPI. By 1 September, the Year-to-Date turnover had already surpassed Rs. 38.8 billion. CSE is in fact the world’s highest gainer in the month of August, according to reports.

With ASPI crossing 9,000 on Wednesday, investors were curious to know how the next day would go and whether the CSE would keep up with its momentum that is turning all eyes on its recent performance. It did keep up with the momentum. The ASPI set a new milestone by closing at 9,339.35, yet the turnover fell below from the previous day’s turnover, as it managed to record Rs. 12 billion and Expolanka closed the day at Rs. 184.

Now, keen investors on social media are crossing fingers for the ASPI to surpass the 10,000 mark within the month.