‘Low valuation of good stocks enabled CSE to realize a net foreign inflow of Rs. 51 billion in 2022’

By Hiran H. Senewiratne

The CSE witnessed more than Rs 50 billion in net foreign inflows due to low valuation of good stocks in the market last year, its Chief Executive Officer Rajeeva Bandaranaike stated.

“Our market is now getting attractive with the digitalization of the system and the introduction of new products in the stock market. Despite the market’s volatility it kept going well. Further, market capitalization of the stock market is 22 per cent of the GDP, Bandaranaike said at a media briefing at Shangri La Hotel on Wednesday. The event was organized by the CSE.

The CEO said that this year they could complete the third and final market digitalization process and also commence a project to introduce the Central Counter Party System, which reduces risks when executing transactions.Bandaranaike added: ” The party in between will manage the buying and selling risk for foreign and institutionalized investors and the completion of the entire set of rules of CSE will be in line with the new SEC Act, which will be passed in the parliament soon.

“To promote good governance in the market, a programme on demutualization of the market is now in the process of being implemented, which will change the structure of the CSE in line with international standards.”

Amid these developments the CSE edged down in mid- market trade yesterday. Delays in the materialization of International Monetary Fund decisions and delayed government action are pushing investors away from market activity, an analyst said.

A Standard Chartered Bank report on Sri Lanka mentions that the overall process of the IMF bailout will be further delayed due to delays in creditors’ confirmation on debt restructuring. This has dampened investor sentiment to a greater extent.

Consequently, both CSE indices moved downwards. The All- Share Price Index went down by 46.21 points and S and P SL20 declined by 10.75 points. Turnover stood at Rs 1.9 billion with two crossings. The crossings took place in Amana Bank, which crossed 111 million shares to the tune of Rs 321 million and its shares traded at Rs 2.90 and Melstacorp 680,000 shares crossed to the tune of Rs 31.3 million, its shares traded at Rs 46.

In the retail market top seven companies that mainly contributed to the turnover were; Softlogic Capital Rs 586 million (33.3 million shares traded), Softlogic Life Insurance Rs 192 million (1.6 million shares traded), JKH Rs 78.2 million (575,000 shares traded), Expolanka Holdings Rs 66.9 million (391,000 shares traded), Browns Investments Rs 63.3 million (9.7 million shares traded), Lanka IOC Rs 59.3 million (324,000 shares traded) and LOLC Finance Rs 57.7 million (8.2 million shares traded). During the day 196 million share volumes changed hands in 18000 transactions.

Despite the current odds the CSE recorded satisfactory turnover levels. The market is these days being driven by the Softlogic Group of companies.Yesterday the US dollar buying rate was Rs 360.39 and the selling rate Rs 371.46.