Technical Analytical Forecast:

Extreme bullishness continues at CSE

Extremely bullish trend at the CSE which started with the dawn of 2010 with both indices going up by around 100 points continued unabated on Tuesday taking the indices further up by 38 (ASI) and 63 (MPI) points by market close.

As expected the record highs were pushed up significantly pushing the all time highs further. A factor that probably helped to propel the market up last two days was the Central Bank announcement regarding the limited relaxation of ‘Capital Account’ controls allowing Sri Lankans to invest abroad and allowing foreigners to open SL Rupee accounts.

Though these, long overdue Economic Reforms fell short of giving the Rupee ‘Full Convertibility’ and lifting antiquated ‘Exchange Control Regulations’, this significant relaxation of outdated bureaucratic controls was welcomed by the market by sending the ASI and the MPI skyrocketing.

This move would bring in a tremendous amount of investment capital to Sri Lanka. Locals holding assets abroad were reluctant to invest in the lucrative domestic financial markets since they were not sure as to whether they would be able to repatriate the capital and profits as and when they want.

Sarath Rajapakse / Capital Trust Securities [email protected] or 0772 333 777