CSE creates records

The Colombo Stock Exchange (CSE) marked new records in both indices All Share Price Index (ASPI) and Milanka Price Index (MPI) on December 21.

The ASPI reached 3,219.87 up by 0.97% and MPI reached 3,6663.45 up by 0.91%. The days turnover topped Rs. 384.9 million.

This positive trend in the performance of the CSE was from May 2009 this year. On 22 May just one week after defeating the entire leadership of the LTTE CSE broke its own record in daily turnover generating over 1.5 billion rupees turnover for five consecutive market days.

Though there were fluctuations the momentum continued and on several occasions CSE marked new records. The earlier record stood at four consecutive one billion rupee market days in 2006 and 2003. According to market analysts this run was a natural outcome of the inherent prospects the country has to offer investors.

In October the CSE surpassed the highest ever turnover recorded for a given year, when it reached Rs.115.2 billion for the year 2009. The previous record was Rs. 114.6 billion recorded for the year 2005. On October 13, 2009 the All Share Price Index (ASPI) reached 3,139.7 the highest point reached by the index.

Again on November 20 the CSE, surpassed the highest ever turnover recorded for a given year when it reached Rs.115.2 billion for the year 2009 to date. The previous record was Rs. 114.6 billion for the year 2005. CSE was ranked the second best performer this year by Bloomberg international, not solely on its own performance but as a result of the crisis in major economies and stock markets. However, market analysts said that these achievements indicate that peace achieved is being translated into optimism in business prospects. The end of the war means which new opportunities and new markets have been opened.

North, East provinces are two three decades behind the rest of the country in terms of economic development. Rehabilitation and reconstruction of these regions means huge investment opportunities.

A huge market for consumer goods and other durables as well as markets for vast amount of natural resources, raw materials, and agricultural products have been opened.

Analysts said that policy supports from the government is also a major factor for the stock market boom. IMF standby agreement facility removed external uncertainty over the Sri Lankan economy.

Stability of the Rupee, lose monitory policy and lowering of interest rate, sharp decline in inflation and lower unemployment rate helped build up confidence on the macro economic stability of Sri Lanka which boosted business confidence. The ongoing election cycle created political uncertainty and a negative impact in terms of attracting investments. The month of December turned out to be a spectacular month for the bourse, with increased foreign activity and the indices reaching heights not reached earlier. The high share prices provided ample opportunities for the retail to make quick profit.

Among the high powered dealings was that of JK Holdings in which over 29 million shares were transacted in a day which saw the turnover exceed five billion rupees. In the diversified Sector Aitken Spence reached Rs. 1,170 on 23 but cooled off.

There was extraordinary interest in the high potential Banking Stocks like NDB, HNB voting and Non voting and Commercial Bank.

The high arrivals in the tourist sector was also instrumental in making massive gains in hotel stocks. Where hot properties witnessed high demand and a substantial hike in its price.

A similar movement was effected in Ahungalla Hotels, Renuka Hotels and Hotel Developers which was fluctuating at various stages.

Dockyard was a big mover in the construction and engineering sector while Chevron made steady advances. The market helped the capitalisation to pass the trillion mark once again.