CSE braces for bloodbath despite new safeguards
Stakeholders of the Colombo Stock Exchange (CSE) are bracing for a massive sell-off tomorrow when it opens after a seven-week shutdown, with foreign investors reported to be waiting anxiously to pull out of the market at the first opportunity.
Stakeholders of the Colombo Stock Exchange (CSE) are bracing for a massive sell-off tomorrow when it opens after a seven-week shutdown, with foreign investors reported to be waiting anxiously to pull out of the market at the first opportunity.
However, the CSE will have two safeguards in place to minimise the damage. Firstly, there will be a significantly shortened trading period. The pre-open session will be from 10.30 a.m. to 11.00 a.m., the Open Auction will take place at 11.00 a.m. and Regular Trading will commence after the Open Auction at 11.00 a.m, before the market closes at 1.00 p.m.
Secondly, the CSE will debut a new circuit breaker system which is set to stop the expected hemorrhaging if it gets out of hand. The Securities and Exchange Commission of Sri Lanka (SEC), which regulates the CSE, on 30 April, introduced a new system under which the market will automatically close for the day if the Standard and Poor’s Sri Lanka 20 (S&P SL20) index, which includes the 20 largest companies by total market capitalisation listed on the CSE, drops by 10% or more.