The CSE witnessed another landmark, as reported earnings crossed the LKR 100bn mark for the first time in the history of the CSE during the first quarter of the calendar year 2021. The growth is a monumental 189% YoY growth compared to the corresponding quarter the previous year.
Recording its best quarterly earnings performance in history of over LKR 109bn, the total reported earnings tally for the past 6 months reached LKR 195 Bn and LKR 285bn on a TTM basis. It is commendable to note that the growth momentum comes despite the period being stricken by waves of COVID induced lockdowns, which severely impacted mobility and overall economic activity.
The growth is in testament to the favorable climate for local companies during the post-lockdown period backed by import protectionism, economic stimulus and USD depreciation which proved to benefit the local industries and export segments whilst pent-up demand helped play a further role in strengthening the earnings performance.
The earnings momentum continued from its depressed state during the first wave of COVID-19, to record a 462% growth c.f. 2Q 2020 and a 28% growth from 4Q 2020, the quarter that was affected by the second wave of COVID-19. A deeper analysis of earnings reveals the thesis that corporates are becoming better equipped to handle lockdowns as it makes its transition into the new normal, whilst the opening up of the economy provides an instant boost following an extended lockdown period.
-Ada Derana