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2020, a turnaround year for Stock Market in Sri Lanka

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* Benchmark ASPI recorded a growth of 10.5% in 2020

* 2020 market turnover highest since 2011

* Market Capitalization grown a trillion rupees since 12th May 2020

* Increasing interest among local youth a key feature

The Sri Lanka stock market ended 2020 on a positive note today, marking a year in which the Colombo Stock Exchange (CSE) has seen indices indicate noteworthy resilience and attract record-breaking levels of trading activity.

 

Market Performance

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.

Overall market activity in terms of the average number of trades carried out during a trading day also increased significantly, ending double the average figure recorded in 2019 and triple the figure recorded in 2018. This indicates high investor participation.

Local Investor Interest a key Highlight

A significant increase in CDS account openings was observed in 2020 with 17,600 new investors entering the market which is 70% higher than the number of new investors in 2019 and 56% higher than 2018. Local investors have contributed to approx. 79% of the total market turnover in 2020 which is higher when compared to approx. 63% in 2019 and 55% the year prior to that.

The year 2020 has also seen a greater interest among younger investors in the retail segment, with 46% of the total accounts opened being attributed to the 18-30 age group. This marks an interesting development considering the fact that a large portion of retail stock market investors have traditionally been above 50 years of age.

 

A capital outflow trend in terms of foreign investors

On the foreign investment front, 2020 has recorded a net foreign outflow of Rs. 51 Billion, largely in line with the foreign fund outflow trend recorded in emerging and frontier markets. However it is noteworthy that Sri Lankan equities attracted purchases worth Rs. 53 Billion during 2020 by foreign investors, ending close to the Rs. 56 billion figure recorded in 2019. The stock market at present continues to indicate attractive valuations relative to other markets in the region.

Growth Initiatives

The Colombo Stock Exchange also introduced a number a progressive growth measures during the year to enhance operational efficiencies and the attractiveness of the Sri Lankan stock market in the perspective of both investors and issuers.

The Digitalization drive of the Sri Lankan stock market which was implemented in 2020 has enabled end-to-end connectivity electronically at all stakeholder touchpoints and was implemented as an industry-wide exercise, bringing substantial convince to investors and operational efficiencies to stakeholders.

During the year CSE also expanded the eligibility criteria for initial listing of shares on the Main Board and the Diri Savi Board to enable a wider spectrum of companies to qualify for a listing. Rule revisions, which were also carried out during the year brought about changes to the IPO timelines and the basis of allotting shares which were done to complement Sri Lanka’s rapidly developing commercial landscape comprising multiple business models and segments. The revisions were directed at improving the efficiency of the listing process while offering greater flexibility to companies listing on the CSE.

 

2021

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.”



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Needs of populace hit by Cyclone Ditwah seen as waiting to be addressed

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Lionel Bopage: ‘Recovery painfully slow.’

By Hiran H. Senewiratne

The government is yet to address fully the needs of the Cyclone Ditwah affected populace though one year has elapsed. The devastation cost the country more than US $ 4.1 billion, an Australia-based Chartered Engineer of Sri Lankan origin said.

‘Cyclone Ditwah affected more than 2.2 million people in 25 districts, which is considered to be one tenth of the population. However, only 39 percent of the allocated funds have been spent to date, the speaker, a one-time General Secretary of the JVP, now living in Australia Lionel Bopage said.

He made these comments at a Rotary Club Colombo South monthly meeting held at the Kingsbury Hotel, Colombo recently.

Bopage quoted from a Loughborough University research report published in February to the effect that Sri Lanka has under invested in prevention but over invested in recovery.

Bopage added: ‘The largest single economic category affected were not buildings but the agriculture sector which provides livelihoods for the majority of affected persons. Therefore agricultural livelihoods have been hit most.

‘More than 58,000 hectares of paddy lands were flooded in the Eastern districts alone, while 46 reservoirs reached critical spill level or failed outright following the disaster.

‘A rapid education sector assessment found that 1,682 schools were affected and more than 555,000 children were unable to attend schools. Further, 622 water supply schemes had been left non-functional and apart from that 11300 homes were damaged or destroyed. But reconstruction is happening at a very slow pace.

‘Tens of thousands of households in the hill country and in the East are still living in damaged properties and on unstable slopes drawing water from schemes that have not been restored.

‘ A Post Disaster Needs Assessment put the cost of resilience at US$ 3.4 billion but restoration work is happening at a slow pace even with foreign donor assistance.’

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WB forecast buoys bourse but weak investor participation slows momentum

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By Hiran H. Senewiratne

The CSE yesterday kicked off on a positive note due to a World Bank forecast that Sri Lanka could achieve 4.4 percent economic growth this year but later lost momentum due to weak investor participation.

Amid those developments both indices moved upwards. The All Share Price Index went up by 132 points while S and P SL20 rose by 21.02 points.

Turnover stood at Rs 1.97 billion with three crossings. Those crossings were; Lanka IOC 2.7 million shares crossed to the tune of Rs 470 million; its shares traded at Rs 127, CCS 2.7 million shares crossed to the tune of Rs 315 million; its shares sold at Rs 118 and JKH five million shares crossed for Rs 91.5 million; its shares traded at Rs 18.30.

In the retail market companies that mainly contributed to the turnover were; Commercial Credit and Finance Rs 126 million (1.3 million shares traded), Lanka IOC Rs 98 million (775,000 shares traded), Asiri Surgical Hospitals Rs 77 million (7.6 million shares traded), Commercial Bank Rs 51.3 million (307,000 shares traded), Sampath Bank Rs 46 million (325,000 shares traded), HNB Rs 37 million (98000 shares traded) and Tokyo Cement Rs 31 million (393,000 shares traded). During the day 50 million share volumes changed hands in 14547 transactions.

It is said that the petroleum sector performed well, especially Lanka IOC, while in the banking sector counters, especially Commercial Bank and Sampath Bank performed well. In the manufacturing sector, JKH impressed.

TAL Lanka Hotels announced that it has scheduled an Extraordinary General Meeting on October 29 to obtain shareholder approval for a proposed Rs 1.87 billion rights issue. The proceeds will be utilized for the repayment of bank borrowings, part refurbishment of the Taj Samudra Hotel in Colombo, settlement of vendor liabilities, and general corporate requirements.

Yesterday the rupee was quoted at Rs 330.95/331.05 to the US dollar in the spot market, weaker from Rs 330.85/95 the previous day, while bond yields were quoted broadly steady, dealers said.

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Huawei continues to showcase practical AI applications at Sri Lanka AI Week 2026

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Sri Lanka AI Week 2026 continued into its second day bringing together government, industry, academia and technology partners to explore practical applications of artificial intelligence. As the AI Technology Partner for the second consecutive year, Huawei showcased 18 use cases spanning government, education, finance, industry, green energy and everyday life, demonstrating how AI can be applied to real-world needs.

Prime Minister Dr. Harini Amarasuriya visited the Huawei exhibition together with officials from the Ministry of Education, Higher Education and Vocational Education, experiencing the Smart Classroom, AI in Education and MindGraph by Beijing Normal University demonstrations. The Smart Classroom demostration highlighted how connected technologies can bring teachers and students in different locations into a shared learning environment, while the AI in Education showcase demonstrated how AI can support teachers, enhance learning and enable more personalised education. The Prime Minister praised the efforts of the Ministry of Education, Higher Education and Vocational Education, Huawei and their partners to demonstrate practical applications of AI in education, noting the role of technology in supporting teachers, expanding learning opportunities, and advancing a more inclusive, equitable and future-ready education system.

Later in the day, Deputy Minister of Digital Economy Eng. Eranga Weeraratne, Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe, Secretary to the Ministry of Digital Economy Waruna Sri Dhanapala, and Chinese Ambassador Wei Huaxiang visited the Huawei exhibition and explored the AI Hands-On Classroom AI Empowering Industry, AI in Education and Smart Classroom demonstrations. Deputy Minister Weeraratne praised Huawei’s practical approach to showcasing AI applications, noting their relevance to Sri Lanka’s digital transformation across education, industry and skills development. The engagement also extended across the wider AI ecosystem, with industry professionals, technology partners, academics and other visitors engaging with the demonstrations and expressing appreciation for Huawei’s practical approach to applying AI across different areas of society and the economy.

Daniel Wu, CEO of Huawei Sri Lanka, said that Huawei will continue bringing global experience, technology and ecosystem resources to Sri Lanka, while working side by side with local partners to build local capabilities, develop local talent and create real value for the country. “I believe that by working together, we can make AI not only more intelligent, but also more local, more inclusive, and more meaningful for everyone,” he said.

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