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| Thursday, 30 December 2004 |
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Stock market will bounce back soon - Analysts Although the downward trend continued at the Colombo Stock Exchange yesterday stock analysts predicted that the market would bounce back in the coming weeks as they expect the disaster caused by the tidal waves would have only a temporary effect on the economy. The market reacted somewhat positively with the All Share Price Index (ASPI) moving down by only 18.04 points and the Milanka Price Index (MPI) moving down by 19.62 points. In comparison the ASPI moved down by 68.14 points and the MPI depreciated 141.77 points on December 28, the first trading day after the worst natural disaster in Sri Lanka. The ASPI closed at 1486.37 points and the MPI closed at 2047.65 points. The Power and Energy sector moved up by 2.3% while Construction and Engineering, Land and Property and Hotels and Travels sectors moved down by 7.6%, 6.1% and 3.5%. A total turnover of Rs 125.1 million was recorded. A total of 1,439 trades were concluded. Foreign investors moved in to the market with net purchases of Rs 18.9 million. At the end of trading yesterday December, 29 the Market Capitalisation of the CSE stood at Rs 377.6 billion. The top gainers included Royal Ceramics, Renuka Hotels, Aitken Spence Hotels Holdings, Lanka Walltiles and Taj Lanka while Palm Garden, Lanka Ceramics, Ruhunu Hotels and Gestetner were among the top losers. Stock analysts, however, warned investors against panic selling as Sunday's unfortunate incident will only have a temporary effect on the economy. They said although the number of casualties is enormous the magnitude of the damage to the infrastructure and industries is far less. "However, the Government and the private sector together must act promptly and efficiently to lessen the impact of this disaster on the country's economy," a spokesman from Bartleet Mallory Stockbrokers told the Daily News. He said that specially the stakeholders in the tourism industry will have to lobby internationally to promote Sri Lanka as a safe place to travel and should focus on the hotels in the cultural triangle and the hill country until the beach hotels come back to operation. He said the CSE is normally dull during the Christmas and New Year season and the negative performance of the market in the last couple of days is not entirely due to the tidal waves that hit the island. "Although the hotel sector might be affected in the next few weeks the construction and healthcare sectors might benefit as a lot of activity in these sectors can be expected in the affected areas. However, investors should carefully monitor the sectors before investing. An analyst of HNB Stock Brokers said that the Hotel sector represents only about one percent of the GDP and the overall impact on the economy would not be very much. "However, political parties and the private sector should shed differences and get together to bring back normalcy to the affected areas as soon as possible. |
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