SEC, CSE hold talks on current state of Colombo Bourse

Wednesday, 13 May 2020 02:19 - - {{hitsCtrl.values.hits}}

With over Rs. 150 billion in value wiped off in just two days and Rs. 500 billion since 6 March, the Securities and Exchange Commission and the Colombo Stock Exchange officials met yesterday to take stock of the current sentiments and trading rules.

The discussions had been primarily been on the new three-tiered circuit breaker rules imposed by the SEC and the meeting exploring various options and ideas.

Sources said no definitive decisions were made but the meeting was useful and ended positively.

The SEC came under attack for arbitrarily introducing the three-tiered circuit breaker rule of market half if the S&P SL20 index declined by 5%, 2.5% and 2.5% leading to closure when 10% fall is reached. Previously, there was no floor except circuit breaker was applied at every fall of 5% followed by a 30 minute cooling time.

Analysts have urged for a broadening of rule with flexibility as well as introduce a minimum volume criteria so as to avoid any manipulation.

Monday’s closure of the market within 38 seconds of opening after S&PSL20 crashed by 10% had caused concern among investors especially foreigners. The abrupt closure was after the CSE was shut down for 7 weeks as part of measures including curfew to stem the spread of the COVID-19 in Sri Lanka.

Colombo stock market’s struggle persists

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