Saturday Dec 14, 2024
Saturday Dec 14, 2024
Monday, 28 November 2011 00:00 - - {{hitsCtrl.values.hits}}
President Mahinda Rajapaksa is scheduled to hear woes of the crisis-hit and losing-value-in-billions-by-the-hour Colombo stock market during a meeting with a group of stock brokers and high net worth investors today.Following a request last week, the President amidst his busy schedule has agreed to give a hearing to brokers at the meeting, which however has no involvement of either the Securities and Exchange Commission (SEC) or the Colombo Stock Exchange (CSE).
Brokers who represent investors have sought to keep President Rajapaksa abreast with the causes for the current crisis in the market, which has fallen by over 12% year-to-date and 25% since all-time-high level in mid-February. The bourse has also lost Rs. 86 billion in value during four days since the 2012 Budget presentation by President Rajapaksa last Monday.
Apparently under pressure as well as running out of options, the audience with the President today comes after the Colombo Stock Brokers Association (CSBA) last week separately meeting the SEC as well as the CSE. At these meetings, the current appalling status of the Colombo bourse had come under spotlight with reasons shared and recommendations made.
Analysts said the group from capital markets would have to make a credible case if it were to win any Presidential intervention.
Budget 2012, which has been widely welcomed, and the remedy sought by high net worth investors in removing SEC Director General Malik Cader for alleged overregulation, have failed to spur the market and investor confidence.
Other analysts attributed the continued dip of the market to a crisis of confidence, especially following the widely-perceived anti-business legislations such as the Expropriation Act as well as downturn of global markets.
Despite the 12% negative return, Colombo still figures among best-performing Asian markets as others have fallen much more sharply.
Year-to-date foreign outflow topped the Rs. 17 billion mark last week though on Friday a marginally inflow of Rs. 18 million was recorded, ending six straight outflow sessions. In 2010 foreign net selling was Rs. 26 billion though the market finished as the world’s most consistent best performer with a 96% gain on top of 125% return in 2009.
