Sri Lanka’s stock market just experienced one of its biggest block trades this year. Business leader Dhammika Perera sold part of his holding in Commercial Bank of Ceylon PLC for Rs. 5.5 billion.
More than 26 million voting shares changed hands at Rs. 195 each through 39 negotiated crossings. In total, 29 million shares were traded, representing 43 % of the day’s Rs. 13.3 billion turnover. The share price closed at Rs. 203.25, up 3 % for the day.
A Liquidity Surge in a Blue-Chip
The sale was done at a slight discount to the closing price. That’s common when large blocks are sold, as buyers expect a cushion for absorbing size. What stood out was the market’s ability to absorb the entire trade without price weakness. Instead of falling, the share closed higher. That’s a clear sign of strong underlying demand.
For the exchange, this was a test of liquidity. A single company accounted for almost half of daily turnover, and the market handled it smoothly. This will strengthen perceptions of the Colombo Stock Exchange’s depth, especially among foreign and institutional investors who value execution capacity.
Shift in the Share Register
Dhammika held over 39 million shares by end-June, or about 2.5 % of the company. Selling 26 million reduces his position to less than 1 %. This was not a strategic stake, but part of his trading portfolio. His strategic focus remains on Sampath Bank PLC and Pan Asia Banking Corporation PLC.
The trade means new players — most likely local institutions, high-net-worth investors or possibly returning foreign funds — have now taken significant positions in one of the market’s most liquid banking stocks.
Index and Market Implications
Commercial Bank is a heavyweight on the CSE and a key component of major market indices. When a large block moves into multiple hands, it effectively increases liquidity in the free float. That typically results in:
- Tighter bid–ask spreads.
- Higher daily volumes.
- Easier access for funds that need size.
This can attract index trackers and long-only funds that prefer liquid blue-chips.
Confidence in the Banking Sector
Three key signals emerge from this trade:
- Resilience under heavy supply. The share price rose even as millions of shares changed hands. This shows demand strength and growing confidence in banking earnings.
- Portfolio rotation, not exit. Dhammika has been reallocating capital this year — acquiring stakes in real estate and energy so this looks more like rebalancing than a negative call on banking.
- Supportive macro backdrop. Renewed investor interest has come amid improving economic sentiment, especially with fiscal and reserve targets being met.
Buyer Profile and Market Tone
While the buyers haven’t been named, the price action suggests they were not short-term traders looking for a quick flip. Institutional and long-horizon buyers tend to support prices, and their entry increases stability in the share register. This may encourage other large holders to consider placements of their own.
Technical Effects on the Market
- More active trading in Commercial Bank in the coming weeks.
- Improved liquidity for brokers, market-makers, and funds.
- A more reliable price discovery mechanism as depth builds.
For the CSE, this kind of high-turnover day sends a message: the market can handle scale without breaking. That can help attract future placements and larger investors.
Valuation and Forward View
The block price doesn’t necessarily redefine fair value. Instead, it reflects the cost of immediacy for a large seller. Investors will keep an eye on:
- Asset quality trends and loan book performance.
- Interest rate movements and margin recovery.
- Dividend policy and capital buffers.
The fundamentals of the banking sector remain the key driver, but the liquidity boost removes a layer of risk that often holds back big investors.
Dhammika Perera’s Portfolio Strategy
This sale fits his pattern of focusing capital where he has operating control or strategic influence. Earlier this year, he increased exposure to real estate and diversified assets. Trimming non-core positions frees capital without signalling any loss of confidence in the banking sector.
His continued involvement in banking through other institutions also reinforces that view.
A Broader Market Signal
Large, orderly block trades like this can shift sentiment. They show depth, attract new capital, and often lead to a more active secondary market. Expect:
- More block trades in blue-chip stocks.
- Higher turnover days.
- Renewed interest from institutional investors.
Bottom Line
Dhammika’s sale is not a negative signal on Commercial Bank’s fundamentals. It is a liquidity event that demonstrates the strength of the market and investor appetite for quality financial stocks.
For the Colombo Stock Exchange, it’s a confidence boost. For investors, it’s a reminder that liquidity itself can be a signal of strength especially when large volumes change hands without hurting price.
