Investors shouldn't panic over minor incidents- Analysts

Stock analysts raised concern that the positive sentiment which the market experienced following the LTTE's announcement of their willingness to hold talks in Geneva could be reversed due to investors being panicked by minor incidents which do not seriously impact the peace process.

The market which rose to record highs immediately following the announcement of the Government's and LTTE's agreement to hold peace talks fell on Wednesday due to the much publicised issue of the alleged abduction of Tamil Rehabilitation Organisation members at Welikanda.

However, analysts said that investors should be optimistic that such incidents are not likely to affect the peace move.

Angelo Ranasinghe of Bartleet Mallory Stockbrokers said that although it is inevitable that such isolated incidents would occur before the two parties meet in Geneva giving undue publicity to such events could only panic investors.

"Our market dipped considerably after the last Presidential Election which was by no means a positive development. The news about the LTTE's willingness to hold talks in Geneva brought back some hope to investors. Negative publicity could only reverse this trend," Ranasinghe said.

Sri Lanka stocks ended weaker on Wednesday as investors panicked amid reports that the LTTE threatened to withdraw from the proposed peace talks in Geneva.

Indika Rajakaruna of Asha Phillip Securities Ltd said that the news about TRO abductions affected Wednesday's trading as investors react to news from the political front. "Any negative news could affect investor confidence," he said.

Meanwhile, there were reports that LTTE allegations about kidnapping was a propaganda trick prior to the Geneva talks.

Yesterday the market brought mixed results. The All Share Price Index (ASPI) went up by 9.31 points to 2129.54 points. However, the Milanka Price Index (MPI) fell by 12.04 points to 2732.89 points. The total equity turnover was Rs. 537.4 Million for the day.

The net foreign outflows were Rs 30.80 million with foreign purchases registering Rs.36.6 millions and foreign sales registering Rs.67.4 million during the course of the day.

The total market capitalisation was Rs. 646.96 billion for the day which is an increase of Rs. 2.82 billion.