ECONOMYNEXT – The Colombo Stock Exchange closed down on Wednesday, data on its site showed.
The broader All Share Index closed down 1.03 percent, or 125.76 points, at 12,102; while the S&P SL20 Index closed down 1.99 percent, or 71.95 points, at 3,547.
Turnover was 1 billion.
Commercial Bank of Ceylon Plc (Rs221mn) and Sampath Bank Plc (Rs207mn) saw selling pressure. Commercial Bank voting shares closed down at 103.50, while non-voting shares closed down at 83.00. Sampath Bank shares closed down at 77.50.
Commercial Bank, the largest private bank by assets, announced yesterday a capital call from shareholders of 22 billion rupees, offering voting shares at 85 rupees and non-voting at 69 rupees.
The 22.52 billion rupees will used to bolster Tier 1 capital to accommodate future lending, the firm said.
“There was a sharp decline in the market from the bell, mainly due to Commercial Bank. There was significant selling pressure on the bank’s shares which trickled to other banking stocks too,” market participants said.
Commercial is the first bank to make a cash call after bad loans and and a sovereign default dented banks following steep rates cuts made in 2020 to target ‘potential output’ by macro-economists.
“There was uncertainty in all banking shares.”
Banking stocks fared poorly in the day. DFCC Bank Plc closed down at 76.50, Hatton National Bank Plc closed down at 194.50, and National Development Bank Plc closed down at 76.40.
There was a net foreign outflow of 24 million. (Colombo/May29/2024)