Considerable increase in daily CSE turnover

Harshini Perera

The daily turnover of the Colombo Stock Exchange (CSE) has increased considerably with the end of the war.

Chairman CSE, Nihal Fonseka said there has been a sudden growth in the stock market just after the end of the war.The daily turnover level of the CSE has increased considerably recently. The level of turnover was about Rs.100 million a day in February and March.

At present this has increased to Rs.300 to 500 million per day. The turnover is one of the key indicators of the appetite of investors for purchasing shares. There was an outflow of foreign investment immediately after the military success but in the last few days there is a net foreign inflow of US$ 2 million he said.

There is an overall growth of 60 percent from the beginning of this year. However, emerging factors such as lower interest rates and improved global and domestic economic conditions can again result in an overall improvement in the value of shares, he said.

The CSE is taking action to increase the number of participants in the stocks market.

The re-opening of the trading floor will also help investors to meet and share information in one location, he said.

The CSE is also hoping to establish a branch in Jaffna in addition to the existing branches in Kurunegala, Matara and Negombo to give greater accessibility to the people in those areas to invest in shares.

Several initiatives to popularise the stock market and educate the public and even school children on investing in shares are being undertaken currently with the idea of increasing the number of people who trade at the stock market, he said.

We want to educate people on the share market so that they make informed decisions instead of speculative ones. We also want to increase the number of companies enlisted with the stock market and several have already shown an interest, he said.

Our objective is to cater to a wider spectrum of companies so that investors have a greater choice of shares and the liquidity in the market increases, he said.

New products are also important to help the stock market grow and an introduction of simple derivatives are being worked on but this will take some time for implementation as a lot of preparation has to be made, he said.