Bourse reflects investor confidence

The Colombo Stock Market's remarkable performance during the first quarter of this year at a time when the country is struggling to recover from the worst ever natural disaster reflects growing investor confidence in the country's economy, stock analysts said.

The growing interest among domestic investors primarily due to the prevailing low interest regime has been further boosted by the political and policy stability, analysts said. "Investors are looking for better returns in the stock market due to low interest rates.

They are also encouraged by the fact that most companies have recorded profits. In addition to all these factors the political stability and policy stability has increased confidence among domestic investors," Vajira Premawardena of Lanka Orix Securities said.

The Colombo Stock Exchange (CSE) recorded a total turnover of Rs. 27 billion which is an increase of about Rs. 15 billion. Daily average turnover also more than doubled to Rs. 484 million from Rs. 212 million.

Analysts said the CSE is on the way to become the best performing financial market in the region. It is only second to the Karachi stock market. There were fears among the business community following the devastating tsunami that the country's economy will be severely affected and analysts feared it would negatively reflect on the performance of the stock market. Rising fuel prices in the international market also created doubts among the investors.

However, the positive political environment in the country has helped the CSE to record an unprecedented growth, analysts said.

Meanwhile, the Market moved up considerably yesterday with the All Share Price Index (ASPI) moving up by 14.85 points to close at 1792.03 points and the Milanka Price Index (MPI) also increasing by 49.63 points to close at 2492.63.

Sectors that recorded noteworthy gains during the day were telecommunications, diversified holdings and power and energy while motors and information technology sectors led the sectors to record negative growth. A total turnover of Rs 387.7 Mn was recorded during the day. A total of 4333 trades were concluded during the day.