Sri Lanka’s stock market gets off to a bullish start in 2021
Sri Lanka’s stock market gets off to a bullish start in 2021

Sri Lanka’s stock market gets off to a bullish start in 2021

The Colombo stock market in Sri Lanka has reportedly gotten off to a bullish start on the first trading day of 2021 by posting sharp gains and boosting its value by Rs. 53 billion.
The All Share Price Index (ASPI) has reportedly gained by over 120 points or 1.78% to reach 6,894 points, highest since December 2015. The S&P SL20 Index gained by over 49 points or 1.87%. Turnover was Rs. 5 billion, almost a record for a New Year trading.
Analysts have been quoted as saying in the Daily FT that the market took off in 2021 from where it ended in 2020. Last year the ASPI had grown by 10.5%, the highest annual increase the index has seen since 2014 and only the 12th occasion the index has seen a double digit percentage growth in CSE’s 35-year history.
The more active S&P SL20 index, which features the CSE’s 20 largest and most liquid stocks, however declined by 10.1% in 2020.
First Capital has stated that the Bourse started 2021 on a positive note recording the highest number of trades (just over 34,000) nearly after four weeks while sustaining the drive in the positive direction for the fifth consecutive session.
“Index witnessed a continuous uptrend since the beginning of the session and closed at 6,895 with an advance of 121 points,” it has added.
The Food and Beverage sector has reportedly led the LKR 4 billion plus turnover closely followed by the Capital Goods sector making a joint contribution of 52%.
NDB Securities has said the ASPI closed in green as a result of price gains in counters such as Ceylon Tobacco Company, Browns Investments and Expolanka Holdings.
It has said high net worth and institutional investor participation was noted in John Keells Holdings. Mixed interest was observed in Tokyo Cement Company voting and non-voting, whilst retail interest was noted in Browns Investments, Expolanka Holdings and ACL Cables, the Daily FT report stated.
The Food, Beverage and Tobacco sector was the top contributor to the market turnover (due to Browns Investments), whilst the sector index gained 3.32%. The share price of Browns Investments increased by Rs. 0.50 (11.63%) to close at Rs. 4.80, the report has noted.
It has further stated that the Capital Goods sector was the second highest contributor to the market turnover (due to ACL Cables), whilst the sector index increased by 1.23%. The share price of ACL Cables moved up by Rs. 7.50 (9.79%) to close at Rs. 84.10.
Expolanka Holdings, Tokyo Cement Company voting and non-voting were also included amongst the top turnover contributors. The share price of Expolanka Holdings gained Rs. 1.90 (6.55%) to close at Rs. 30.90. Furthermore, the share price of Tokyo Cement Company recorded a gain of Rs. 3.70 (4.86%) to close at Rs. 79.90, whilst the share price of Tokyo Cement Company non-voting appreciated by Rs. 4.10 (6.01%) to close at Rs. 72.30.
The overall value of the stock market, which is represented by the market capitalisation, has also improved adding Rs. 109 billion during 2020 and more substantially by Rs. 983 billion since 12 May.
With bullish sentiments from investors market capitalisation gained by Rs. 53 billion (almost half of 2020 full year) and crossed the Rs. 3 trillion mark on Monday (4).

OSL take:

The bullish start of Sri Lanka’s stock market is indicative of the strength and resilience of the country’s economy. Sri Lanka has shown great resilience to external and internal challenges through the years. Therefore, Sri Lanka continued to attract foreign investments even last year despite the Covid 19 challenges. Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have made it a business hub in the South Asian region. Foreign businesses/investors could therefore explore business/investment opportunities in the key economic sectors in Sri Lanka.

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Article Code : VBS/AT/20210108/Z_4

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