CSE sees shortest trading day in history

– Market closed within a minute on a blink-and-you’ll-miss-it day

The brand new circuit breaker system at the Colombo Stock Exchange (CSE) was activated within the first minute of opening yesterday (11), bringing the market to a halt, and then to a close, in what is believed by seasoned market observers to be the shortest trading day at CSE since its inception in 1985.

Regular trading commenced at 11 a.m. and was brought to a screeching halt in approximately 30 or 40 seconds by the new circuit breaker system, which was designed to close trading for the day if the S&P SL20 index of the 20 largest listed companies falls by 10%.

The CSE had resumed trading after a seven-week closure yesterday, and the pent up selling pressure was evident in the brief period the market was open. The S&P SL20 fell 186.89 points, or 9.60%, to 1,760 points while the All-Share Price Index (ASPI) fell 179.20 points or 3.92%, to 4,392.43. Turnover was a meagre Rs. 24.8 million.

The fall in the S&P SL20 was mainly due to price losses on index-heavy counters such as John Keells Holdings, Sampath Bank, Commercial Bank, Distilleries Company of Sri Lanka and Hatton National Bank. Overall the market lost Rs. 83.4 billion in value in the fleeting moment the trading was open.

However, the dreaded foreign outflow did not come to pass, presumably due to a lack of sufficient trading time. In fact, foreigners were seen buying, helping to post a net foreign inflow of Rs. 596,664. Foreign purchases accounted for 3% of today’s turnover with Sampath Bank seeing the highest net foreign inflow while Sierra Cables witnessed the highest net foreign outflow.

Market analysts expect this situation to continue and more trading halts to happen until queued sell orders are cleared.

The curfew imposed in the evening of 20 March made the CSE the stock market that had been closed for the longest period in the region due to Covid-19. In fact, only the Dhaka Stock Exchange in Bangladesh has been closed for a somewhat similar period, having shut its doors on 29 March. Despite many countries around the world being in a state of lockdown or curfew, the stock exchanges of these countries have generally been open for trading. Most notably, other frontier markets have gradually recovered from the Covid-19 as they remained open despite their respective countries enduring lockdown.