Consensus hopes boost investor confidence

Channa Kasturisinghe

BOURSE: Heavy local interest in blue chips helped the market to continue its upward momentum with both indices recording over 1.3 percent gains.

The turnover too improved considerably compared to the previous day recording Rs. 377 million at the close.

Analysts said market responded positively to the President's call for a National Government and some were of the view that investor confidence has gained as Sri Lanka's security forces have been able to restrict violent activities by the LTTE.

"The President's call for a National Government has once again revealed the Government's commitment towards a negotiated solution to the North East problem. At the same time it has taken a firm stance against ceasefire violations by the LTTE," an analyst said.

Yesterday, the All Share Price Index gained 28.89 points to close at 2,199.97 points and the Milanka Price Index rose by 37.44 points to close at 2,798 points.

"There was improved interest in blue chips specially by local investors. Dialog, JKH, Distilleries, Lanka IOC and Nations Trust Bank were among heavily traded stocks. There was an element of speculation especially on stocks such as Nawaloka Hospitals," Angelo Ranasinghe of Bartleet Mallory Stock Brokers said.

He said at present share prices remain attractive and investors can look for opportunities of making profits. "What we have is a basically undervalued market as the prices of most shares remained stagnated for a while.

Apart from that most companies have performed impressively during the first two quarters. If both main political parties shed their differences in the national interest the market is bound to go high," Ranasinghe said.

Some analysts said that the improved participation of local investors in stock market trading could be due to the fact that the Government has been able to maintain peace in the rest of the country while the military is successfully resisting LTTE attacks.

"The most important sporting event of the South Asian region was concluded successfully in Colombo last week.

The fact that Colombo could host such an important event without any disruption too is clear evidence of security in Colombo.

Such factors can boost investor confidence and we expect them to actively participate in the trading in the coming week," an analyst said.