he stock market continued to move into positive territory during the first week of January, with the All Share Price Index (ASPI) climbing 129 points (3.8%) from where it was at 31 December (3,357 points).

This positive momentum was supported by strong volumes, as market turnover in the first week of the new year reached 11.2 billion rupees at a daily average of Rs. 2.2 billion.

Indeed, analysts expected there to be good news, given that many records tumbled in 2009.

RECORDS TUMBLE: Year 2009 kicked off with many uncertainties, after the index crashed to 1,500 points in December 2008. However, with the end to the war, the ASPI reached its highest recorded level in the history of the exchange – a growth rate of 125 per cent in 2009.

Some of the bourse’s most notable achievements during 2009 were as follows:

m The highest growth recorded by the ASPI in any given year, surpassing the previous record of 118 per cent eight years ago, in 1991.

m The highest annual turnover, generating a massive Rs. 142.5 billion. The previous record was Rs. 114.6 billion, in 2005.

m The number of transactions for a trading day reached a milestone, when 15,290 trades were executed on 18 June.

m The total number of transactions executed during the year (1.27 million) was the highest volume recorded in the CSE’s history.

m Net foreign flows registered an outflow of Rs. 785 million, the first net outflow since 2001.

m Market capitalisation cro­s­­s­ed the trillion rupee mark for the first time and closed the year at its highest point, at 1,092 billion rupees.

According to Bloomberg’s newswire service, these reco­r­ds and the rise in the index crowned Sri Lanka’s stock market as the second-best performer in the world in 2009.

While the CSE reached such dizzy heights, its growth composition in 2009 was different to that in the preceding three years. Growth last year was spearheaded by the construction and engineering sector, which appreciated by as much as 356 per cent.

Meanwhile, investment trusts, oil palms, trading, and hotels and travels recorded the largest gains of 323, 254, 240 and 199 per cent respectively.

In the period between 2006 and 2008, growth was dominated by telecom and banking stocks – and they continue to represent the larger proportion of the market’s composition.

SHIFT IN MARKET CAPITALISATION: At the end of 2006, total market capitalisation of the bourse stood at Rs. 840 billion but dropped in the next two years, touching a low of 488 billion rupees in December 2008.

Nevertheless, market capitalisation jumped to Rs. 1,092 billion by the end of 2009, which means that the value of stocks listed on the exchange more than doubled within a year.   

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