The Sri Lankan stock market ended 2020 on a positive note yesterday, marking a year in which the Colombo Stock Exchange (CSE) has seen indices indicate noteworthy resilience and attract record-breaking levels of trading activity.
The benchmark All share Price Index (ASPI) closed 2020 recording a growth of 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 ASPI ended 2020 on 6774.22 points. Sri Lanka’s ASPI was also recorded as the best performing stock market index for the month of September 2020, with the index recording a remarkable 12% growth during the month.
The ASPI on 12th May 2020 recorded its lowest point in over a decade but recovered from this to post a 59% gain by the end of the year. Although the S&P SL20 index, which features the CSE’s 20 largest and most liquid stocks has declined by 10.1% in 2020, the index has recovered substantially indicating a trend similar to the ASPI with 57% growth since 12th May, closing at 2638.10 points as of 31st December 2020.
The overall value of the stock market, which is represented by the Market capitalization, has also improved adding Rs. 109 Billion during 2020 and more substantially by Rs. 983 Billion since 12th May. The market recorded a daily average turnover of Rs. 1.9 Billion, this daily average turnover is the highest recorded for a year since 2011. The total turnover for the year was Rs. 397 Billion which was also the highest since 2011.
Commenting on key developments to be expected in 2021 CSE Chairman Dumith Fernando Said “In 2021, major market infrastructure developments, Product Diversification, widening of the investor base, building a sustainable business model and more importantly working with the Government and the regulator to position the CSE as a pivotal point for capital raising are all on the cards. Increasing the number of companies listed on the exchange is one of the CSE’s key strategic objectives and we are making steady progress on this front. We look forward to enhancing the listing process and establishing a single window within the CSE for potential listings that would make a Public listing on the Exchange a smooth and efficient process.”
Dumith went onto say “Similar to the Real Estate investment Trusts frame work which was introduced in the final quarter of 2020, we are working on the creation of an OTC market for REPOs on Corporate Debt, trading of Gold-backed products and Stock borrowing and lending. On the Regulatory and Governance fronts, we believe the new SEC Act will be an important development covering regulatory changes required for continuing to safeguard investor rights, enabling the de-mutualization of the CSE, facilitating new product development and strengthening the effectiveness of market regulation And of course we see many of the value drivers which have supported strong market performance since May, continuing into the new year. Thus we are entering 2021 on a hopeful but positive note.” (Colombo Gazette)