Period under review 8.4.96 to 18.4.96.
With the Avurudu holiday mood prevailing, local investors seemed to be forgetting the market with foreign participation being erratic due to large cross-overs on some days, turnover levels swung from high to low. The lowest turnover for the year so far of about Rs. 2 million was recorded during this period.
As expected a terrorist attack was witnessed in Colombo. Although major damage to the Colombo harbour was thwarted, the uncertainty of the security situation seems to have made some foreign fund managers panic and opt for a more cautious approach towards investing in Sri Lanka.
Insurance premiums on cargo to and from Colombo are likely to experience a further increase in view of the recent harbour attack.
With a major operation under way in Jaffna, further repercussions could be felt in Colombo or other major cities.
The hotel and non-export manufacturing industries sector seems to be the worst affected. While the civil war is directly affecting the hotel sector, the haphazard manner in which the tariff protection has been lifted seems to have affected the non-export manufacturing sector.
With the labour charter also expected to be implemented in the coming months, industries will be in for a new experience. So far, Spain is the only country to implement the charter. The country has a 15 per cent unemployment rate.
When financial performances for the year ending March 31st 1996, are released in mid April, most quoted companies are expected to report mediocre performances.
Property prices which were on the increase in Colombo are reported to have slumped 10 per cent to 15 per cent during the year (Research Property venture Hong Kong).
Treasury Bill rates during the period under review have increased marginally and are expected to increase further.
Going by the annual reports of the commercial banks, quoted in the stock market, there seems to be an increase in deposit growth over the previous year.
The question also arises as to whether, in a recessionary period such as we are now going through in Sri Lanka, has the loan growth rate also increased?
In the period under review, the ASI has dropped 16 odd points. Foreign participation was erratic. Local retail and institutional buying marginal.
The market may come down further, to the ASI 650 level before buying pressure comes in the form of retail investors.
Return to the Business contents page
Please send your comments and suggestions on this web site to
info@suntimes.is.lk or to
webmaster@infolabs.is.lk