CSE’s bearish run proving costly

By Hiran H.Senewiratne

The CSE has seen a bearish run during the last few days and that has wiped off Rs. 475 billion in value in just 10 market days so far in February, with previous day adding Rs. 143 billion, stock market analysts said.. 

Yesterday the stock market witnessed some volatility in the morning and it fell by 190 points. Later it recovered but went down again. During the latter part of the day or last hour it signaled some stability and turned positive and closed with marginal gains, analysts said.

With these developments both indices moved upwards. All Share Price Index went up by 7.4 points and S and P SL20 rose by 18.9 points. This upward trend indicated some stability following its regulator, Securities and Exchange Commission’s, new rule to all stockbrokers and stock broking firms to report all credit that has been extended to investors, on a weekly basis. This created some panic in the market initially because stock brokers limited the credit extended to investors, market analysts said.

With this new rule the market moved downwards and some brokers recovered their funds and some reduced their credit to investors, analysts added.

Consequently, turnover stood at Rs 3.3 billion with two crossings. Those crossings were reported in Asiri Surgical Hospitals, which crossed 7.3 million shares to the tune of Rs 120 million, its shares traded at Rs 18 and Seylan Bank (Non Voting) one million shares crossed for 41 million, its shares traded at Rs. 41.

In the retail market, top five companies that mainly contributed to the turnover were; LOLC Rs 458 million (1.37 million shares traded), Haycarb Rs 220 million (2.1 million shares traded), Dipped Products Rs 212 million (3.5 million shares traded), Vallibel One Rs 205 million (3.4 million traded) and Hayleys Rs 201 million (2.99 million shares traded). During the day, 113.7 million share volumes changed hands in 27237 transactions.

It is said that the market was volatile throughout the day because investors have become worried with the spreading of the Covid 19 new variant and also because of the political uncertainty due to issues on the diplomatic front with China and India.

Sri Lanka rupee was quoted around 197.50/198.00 levels to the US dollar in the spot-next market on Wednesday, while bond yields quoted wider, dealers said.

The rupee last closed in one-week forward market at 197.50/198.50 levels on Tuesday. In the secondary market bond yields edged up drastically, dealers said.