Following drop in bank interest rates, conducive environment:

CSE active with investors

Hiran H.Senewiratne

Most fund managers and high net-worth investors are very active in the Colombo Stock Exchange (CSE) following the drop in bank interest rates and the improved internal environment in the country.

Due to these developments the All Share Price Index (ASPI) declined by 50 percent compared to its peak level in 2007.

During its peak in 2007 the ASPI, which went up to the 3016-point range dropped to 1800 points.

It is now on an upward trend due to the improved internal environmental conditions, CSE sources said.

Chief Executive Officer, Ceybank Unit Trust, Chitra Sathkumara said they have witnessed that the equity market or the stock market is active with high net worth individuals, local institutions moving up the market and improved business sentiment.

Once the A9 road is opened many rehabilitation and infrastructure projects are expected to be launched in the Northern and Eastern Provinces, which will result in increased business activities in the country. Therefore, the CSE will be more active than never before, Sathkumara said.

This positive trend will help to move up values of blue-chip companies followed by small valued companies in the market from the medium to the long-term perspective, he said.

Fund Manager, National Asset Management, Ravi Amarasinghe said there is cross buying in the market these days which has renewed interest among fund managers and high net worth clients in the CSE.

He said that the market is heading towards an upward trend with the drop in bank interest rates on a few occasions and the improved internal environment prompted high net worth and institutional investors to be active in the market.

With these developments certain sectors including hotels, manufacturing, infrastructure and rehabilitation will improved in the future and the demand for certain selective stocks will increase in the future, he said.

Sri Lanka being a small country, it is easy to revamp the economy within a short span of time with the reconstruction and rebuilding activities in the Northern and Eastern parts of the country, Amarasinghe said.