Business

CSE records highest turnover in 12 weeks after Prez policy statement

  • Expolanka and LIOC see collective turnover of nearly Rs. 1.5 bn

By Imesh Ranasinghe 

The Colombo Stock Exchange (CSE) surpassed Rs. 3.5 billion in turnover yesterday (4), its highest in twelve weeks, as the market reaped the results of positive sentiment generated about the economy after President Ranil Wickremesinghe’s policy statement.

Expolanka and Lanka IOC recorded a turnover of almost Rs. 1.5 billion collectively during the day. Lanka IOC recorded the highest number of shares traded within the day, with 4.9 million shares traded, while Expolanka saw 4.5 million shares traded, and LOLC General Insurance PLC saw 4.4 million shares traded.

The All-Share Price Index saw an intra-day high of 8,285.50 before ending the day at 8,229.14, a gain of 149 points (1.84%) from its previous close, the highest recorded after 30 May, while the S&P SL20 saw an intra-day high of 2,706.54 before ending the day at 2,677.67, a gain of 91.62 points (3.54%) from its previous close. A total of 150 million shares were traded within the day.

Individual shares such as Industrial Asphalts (Ceylon) PLC gained by 33.33% (Rs. 0.40), Beruwala Resorts PLC by 18.18% (Rs. 0.20), Lanka Milk Foods (CWE) PLC by 17.16% (Rs. 18.75), and Chemanax PLC by 16.64% (Rs. 9.20). 

It was also observed that shares of plantation companies, which recorded gains in the last two weeks, have started to lose their gains, as all such shares were down in the Main and Diri Savi Boards of the CSE.

So far, in the first four days of this month, the market value at the CSE has increased by Rs. 307 billion to Rs. 3.62 trillion, while the market also recorded also recorded Rs. 206 million in net foreign sales yesterday, bringing net foreign sales to Rs. 209 million in the month of August so far.

Further, in a statement on Wednesday (3), the CSE said it has adopted progressive changes to its listing framework for new listings, offering a wider choice of listing options for companies wanting to list shares on the Main and Diri Savi Boards. 

It said that an analysis of recent listings on the CSE indicated that these amendments in particular have paved the way for two companies to list on the CSE and access capital market-based funding valued at Rs. 4.7 billion. Both Initial Public Offerings (IPOs) that took place were oversubscribed on the opening day and by 16+ times collectively, drawing considerable investor interest at the time. Interestingly, the listing framework prior to the amendments made by the CSE may not have attracted these two corporates – indicating that the amendments have been successful in making a stock market listing a possibility for a broader array of aspiring issuers. 

“These recent issuers representing two different industries have benefitted from the CSE’s initiative in broadbasing the profit-oriented eligibility requirement applicable to the Main Board. Prior to the amendments, the CSE Listing Rules required that all companies aiming to list on the Main Board demonstrate net profit after tax for three consecutive financial years. Three alternatives to this requirement were introduced by the CSE as part of the amendments,” the statement said.

Moreover, the CSE said that its Main Board listing criteria now accepts companies that can demonstrate an aggregate net profit after tax for three consecutive financial years, meaning that companies aiming to list on the exchange are no longer required to be profitable in each of the three financial years immediately preceding the date of the initial listing application.