Investor confidence boosts CSE trading

by Shirajiv SIRIMANE

The end to war, resulting in the country regaining investor confidence was the main reason for the Colombo Stock Exchange (CSE) to record an all time high on Friday.

The main price index of the CSE, the All Share Price Index (ASPI) reached its highest ever point with the ASPI closing at 3,018.01 points, surpassing its previous record of 3,016.4 points in February 2007.

The market has gone up by 57 percent after the war. During the conflict, the CSE averaged Rs. 260 million turnover a day. "Now we average over Rs. 495 million a day," said Manager, Business Development, CSE, Thushara Jayaratne.

"The daily transactions before the war was around 2,700 while now it is at around 5,000," he said the turnover of the four branches in Matara, Kandy, Kurunegala and Negombo too has risen significantly.

Mohan Das Thangarajah of First Guarding Equities said that the end of conflict has put back investor confidence in the country.

"During the peak of the war in the early parts of the year many investors local and foreign withdrew funds from the country.However they are once again reinvesting in the country," he said.In addition, the macro economic situation of the country has improved after the war and this has become another positive factor.

"The Central Bank's decision to lower the interest rates too has had a positive impact on the Stock Market," he added.

Managing Director\CEO, Acuity Stock Brokers, Deva Ellepola attributed the Stock Market performance to the end of the war."With it, the investors local and foreign are also expecting an economic recovery in Sri Lanka," he added.

He said that most of the trading was done by local entrepreneurs and predicted that foreign trading too would pick up in the future.Ellepola said that global economies are recovering from the recession and this too helped the CSE trading.

The ASPI measures the movement of share prices in all the listed companies.

The ASPI which opened on Friday at 2,997.6, closed at 3,018.01, moving up by 20.4 points (0.68%). The Milanka Price Index opened at 3,352.8 and closed at 3,394.8 moving up by 41.7 points (1.25%).At the close of trading, the total value of the CSE (Market Capitalization) surpassed all previous levels to reach an all time high of Rs 966.9 Billion.

A total turnover of Rs. 89.2 billion was recorded so far this year, with an average daily turnover of Rs. 495.6 million.

The ASPI of the CSE has recorded a remarkable growth of 100.8% for this year and the MPI recorded a growth of 108.1% making CSE, the best performing Stock Market in Asia and the 4th best performing stock market in the world according to Bloomberg Newswire.