Financial Times

Stockbrokers speculate on LTTE pullout from ceasefire
Stockbrokers said last week that the market is likely to crash this week with the anticipated announcement by LTTE leader Velupillai Prabhakaran today of a pullout from the ceasefire agreement or veiled threats to the government over the peace process.

“Prabhakaran's speech has a direct bearing on the stock market and the general perception is that he will pull out of the ceasefire agreement, paving the way for war, once again.

This will definitely prompt the market to crash this week,” said Chitra Sathkumara, CEO, Ceybank Unit Trust, in a view that was shared by many other brokers.

However, The Sunday Times FT reliably learns that the LTTE leader is unlikely to pull out of the peace process but would make certain demands like the ISGA being the basis for resumed discussions. President Mahinda Rajapakse on Friday told Parliament he would like to reopen talks with the rebels.

The militant leader will make his annual Heroes Day speech in Kilinochchi, an event that would be closely monitored by many in Sri Lanka including the business community. Niyaz Aboobucker, Senior Manager Trading, Asia Securities said the market is both curious about the revised budget presentation in addition to Prabhakaran's statement. “All players in the market want to know about his stance on the ceasefire agreement,” he added.
Shafraz Jabir, Research Analyst, SC Securities said today’s speech by the LTTE leader will create ripples in the Colombo bourse. “The outcome in the stock market this week and for the next few weeks will depend on Prabhakaran’s statement,” he said.

He said if by chance Prabhakaran declares an independent state and pulls out from the ceasefire, the stock market will crash. Vajira Premawardhana, Executive Director, Lanka Orix Securities Company (Pvt) Ltd., said there is a general declining trend in the market and investors will play the waiting game until there is a clear policy on the peace talks and the economy. “The market will have a very lacklustre attitude until these two areas become clearer,” he said.

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