Stock market remains buoyant in 2021

The Colombo Stock Exchange (CSE) has recorded 9.3 percent growth in Year-to-Date (YTD) All Share Price Index (ASPI) within the first 05 months of 2021.

The S & P SL 20 Index fared even better with YTD growth of 13 percent. The market also saw record breaking YTD market turnover volume of Rs.414.5 billion for the first 5 months of 2021.

The YTD market turnover for 2021 exceeds the annual Market Turnover of Rs.396 billion achieved in 2020. Accordingly, 2021 YTD market turnover is already marked as the 3rd highest market turnover recorded in the history of CSE and the highest market turnover recorded within a shortest period of time.

Previously high market turnover volumes were recorded during the period 2010 and 2011, where Rs.570 billion and Rs.546 billion were achieved. The YTD daily average market turnover for 2021 is Rs.4.4 billion as at 31st May 2021 and is the highest daily average turnover in history. The average number of trades per day is approximately 27,000, which is doubled compared to 2020.

Another significant development in 2021 is the activation of the primary market for debt and equity. With the government incentivizing the use of the capital market, already 3 Initial Public Offerings (IPOs) were successfully concluded with all 3 issues being oversubscribed and closing on the opening day and raising an aggregate of Rs. 3.9 billion in equity capital.

Two of the IPO’s already commenced trading and these traded above the issued price. More equity IPO’s are in the pipeline for 2021. The CSE also saw the very first listing of a SME company on the Empower Board and the state owned Ceylon Electricity Board issuing a Listed Public debenture.

The market digitalization efforts also saw a significant number of new accounts being opened. Since the electronic account openings were enabled in September 2020, the daily volume of new accounts have doubled and many new younger investors are entering the stock market.

It is also noteworthy to mention that despite the significant increases in the market turnover, number of trades and the number of new accounts, the stock market is now operating remotely in view of the ongoing pandemic and the resultant travel restrictions. The CSE and all the market intermediaries have very quickly and successfully evolved to convert their operations to a digital format to operate from remote locations under a Work From Home (WFH) concept in keeping with the government health and safety regulations.