Colombo correction gets colossal!

Hitherto the world’s most consistent best performer, the Colombo Bourse continues to see colossal correction with Rs. 35 billion in value wiped off yesterday, bringing the total to Rs. 152 billion since an all time peak on 14 February.

Of the Rs. 152 billion value lost, Rs. 107 billion had been during the past three days. However, yesterday’s loss is lower in comparison to the Rs. 45 billion which the market suffered on Tuesday.

On Friday Colombo’s market capitalisation was Rs. 2.555 trillion, which had come down to Rs, 2.448 trillion yesterday. On 14 February the all time high market capitalisation was Rs. 2.600 trillion.

Analysts said that correction was welcome, but noted that several stocks saw dip in their share price only on thin volumes such as 100 shares.

NDB Stockbrokers said correction was expected due to the rapid increase in indices over the last few weeks.

“The indices increased due to the rise in prices of a selected group of illiquid stocks. However, the current correction is bringing down the prices of other stocks as well,” it added.

NDB also said both indices dipped continuing the prevailing negative momentum. All sector indices decreased amidst force selling and profit taking across the board.

In comparison to 1.8% dip in ASI, yesterday the decline was lower at 1.3% but blue chip inclusive MPI’s dip was slightly greater yesterday at 1.24% as against 1.18% the previous day.

Year to date the ASI had gained by 10.66%, down from the February 14th high of 17%. Despite the lower growth Colombo remains Asia’s best performing market.