Ceylon Chamber urges opening of stock market this week

The Ceylon Chamber of Commerce (CCC) has urged the Securities and Exchange Commission of Sri Lanka (SEC) to reconsider its decision to shut trading at the Colombo Stock Exchange for the entire next week and instead keep the market open.

Several brokers too have frowned on the SEC decision while economists said it would send a wrong signal to the international community that business has been affected by the political unrest. The SEC said the decision was based on political and economic uncertainty. 

In a letter to SEC Chairman Viraj Dayaratne, the CCC said it was dismayed by the decision to close the market for five days from April18.

“As pointed out by the Chamber when the market was closed during the early days of the COVID -19 pandemic, the sudden closure of the market creates many challenges to local and foreign investors as explained below:

1. One group of investors (potential sellers) is prevented from exiting the market at the time and price of their choice

2. Another group of investors (potential buyers) is prevented from acquiring shares at the time and price of their choice

3. All investors will be unable to carry out valuations and mark to market their respective investment portfolios

Since there are circuit breakers in place to arrest a sharp movement in market indices, we believe that there is absolutely no need to close the market in this manner sending out a wrong signal to all investors across the globe. This action will be seen by market participants as akin to the unsuccessful attempt made to hold the exchange rate constant against market forces,” the letter said.