- Market rebounds after initial selling pressure
- Uncertainty over debt restructuring remains a concern
The Colombo Stock Exchange (CSE) saw a monthly high on Monday (23) as the political uncertainty clears out with the appointment of the new President and his confident speech when he was sworn in, a market analyst said.
Speaking to The Daily Morning Business, First Capital Chief Research and Strategy Officer Dimantha Mathew said that although there was selling pressure during the first 20 minutes of the market opening, the market recovered with the appointment of the President.
“We have already seen a bottoming out effect and the market has already reversed but with the actual appointment,” he said, adding after the speech by the President, where there were no real drastic controversial statements made, some amount of sanity came back into the system.
Accordingly, the main index jumped by 130.30 (1.19%) to 11,096.81 while the S&P SL20 rose by 58.43 (1.88%) to 3,160.63. The market recorded a turnover of Rs. 994.4 million with 49.1 million share volumes.
He said that the continuous downturn witnessed in the market over the last two to three months has reversed with the change in government.
However, he said that the uncertainty around the external debt restructuring still looms in the market whether it will get completed or not.
Commercial Bank and Hatton National Bank were the top positive contributors to the All Share Price Index (ASPI) with 19.42 and 16.75 points.
Richard Peiris and Company and Ceylon Tobacco Company (CTC) contributed negatively to the main index with -2.50 and -2.37 points.
He suggested that the banking counters have risen due to the assumption that, since no significant changes have been announced so far, the new President will continue to prioritise completing the debt restructuring process.
He said that simply because of the deal the banking counters and on the assumption that since nothing significant has been said so far, the new president will also take steps to complete the debt restructuring.