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| Tuesday, 24 June 2003 |
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Steep rise of Stock Market The Colombo Bourse's All Share Price Index (ASPI) exceeded the psychologically important 1,000 level yesterday, finally closing at 1036.1 points, up from 995 points the previous trading day. Stock Market analysts earlier predicted that the ASPI would cross the 1,000 level this week, after it closed at 995 points last Friday. The Milanka Index also moved up to 2023.4 points from 1913.1 points and the total turnover exceeded Rs. 896.5 million. This kind of performance was last seen around eight years ago and was unthinkable even a couple of years ago, when Sri Lanka was mired in recession. The rise of the stock market proves beyond doubt that the economy has bounced back from that gloomy scenario. A couple of weeks ago, the international community expressed its collective confidence in Sri Lanka. It seems the investor community too has followed suit, judging by the remarkable performance of the Colombo Stock Exchange. It also means that domestic and foreign investors have not lost faith in the Sri Lankan economy despite the somewhat uncertain situation created by the LTTE's temporary withdrawal from the peace talks. The massive quantum of aid pledged by the donor community in Tokyo and their firm request to the LTTE to get back to the negotiations would have allayed any fears harboured by the investor community to a great extent. It is also interesting to note that local investors have dominated the stock market. This is a sign that local buyers and sellers are once again very active on their home turf, so to speak. Their input is vital to maintain a healthy economy, for no country can hope to develop its economy through foreign investment alone. That said, foreign investors must continue to play a major role in the Bourse and of course, outside it in terms of other investment projects under the Board of Investment. The stock market used to be a closed-door institution that only the fabulously wealthy could aspire to enter. Not any more. There have been a number of high-profile share issues which gave a chance to small-time investors and individuals to own a small parcel of shares. Nor is the Bourse confined to Colombo. It has two outreach units in Matara and Kandy which have recorded significant gains since their opening. The Stock Exchange has also conducted awareness seminars for schoolchildren and businessmen in Colombo and the outstation areas to popularise the share-owning habit. The Colombo Stock Exchange, which is already one of the most modern in South Asia with a real-time on screen trading system, will go one step further with an on-line facility soon. It is already possible to get up-to-the minute details on share transactions through the web, but the new system will be totally interactive, enabling investors to execute transactions on-line. All an investor will have to do is point his browser to www.investoraccess.net in order to conduct share transactions at the Colombo Bourse. A similar service will be available through the Short Message System (SMS) of Dialog GSM. All these laudable initiatives would have contributed to the Bourse's progress towards breaking the 1,000 barrier. As several analysts have pointed out, the 1,000 level is a psychological factor that will encourage more investors to come into the market. At the same time, it will be prudent to welcome more companies to the Bourse's fold for listing. We see more small companies perform well among the Blue Chips, which is an ideal incentive for other small firms to join in. Sri Lanka's Bourse may be tiny in comparison with the major-league bourses such as New York and Hong Kong, but its solid performance is already attracting worldwide attention. A vibrant Stock Exchange will help Sri Lanka achieve a coveted status as the financial hub of the South Asian region. |
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