Revised ASPI calculation method triggers temporary panic in bourse; but turnover hits Rs 18.4 billion

By Hiran H.Senewiratne

The revised index calculation methodology of the CSE’s All Share Price Index from full market capitalization-weighting to public float-adjusted market capitalization was implemented from yesterday. With the implementation of this new system stock market investors became rather panicky and the market turned negative but during the latter part of the day buying interest was noted and the market turned positive, stock market analysts said.

‘Accordingly, this project should also be completed on time in the same way the Delivery Vs Payment (DVP) project was completed, since this will significantly enhance the post trade risk management of the equity market. Further, the new SEC Act has all the enabling provisions to facilitate the implementation of a Central Counter- Party (CCP) mechanism.

Amid those developments both indices moved upwards. The All- Share Price Index went up by 12.5 points and S and P SL20 rose by 30.2 points. The market turnover stood at Rs. 18.4 billion with two major crossings. The crossings were reported in JKH, which crossed 80.1 million shares, which were equal to five per cent of the total shareholdings to the tune of Rs. 12.9 billion at a share price of Rs 161. Since the company has not yet announced the transaction, CSE sources said that City Group, being the largest shareholder, which owned 440 million shares would have been involved in the transaction by way of an internal transfer or investiture to another party. Another crossing was reported in Kelani Cables, which crossed 170,000 shares to the tune of Rs 102 million; its shares traded at Rs 600.

In the retail market top five companies that mainly contributed to the turnover were, Expolanka Holdings Rs one billion (2.7 million shares traded), Browns Investments Rs 352 million (20.9 million shares traded), ACL Cables Rs 318 million (2.5 million shares traded), Kelani Valley Plantations Rs285 million (2.6 million shares traded), LOLC Holdings Rs 262 million (2.6 million shares traded), Hayleys Rs 221 million (1.5 million shares traded), and LOLC Finance Rs 174 million (6.1 million shares traded). During the day, 207 million share volumes changed hands in 43000 transactions. Further, the Central Bank has given approval for the merging of LOLC Finance and Commercial Leasing and Finance. With the proposed merger Commercial Leasing and Finance will no longer exist.

Yesterday, the US dollar was quoted at Rs 202, which was the controlled rate of the Central Bank to contain prices of import- export items in the country.