Market dips despite so-called 'good news'

17 August 2012 02:53 am - 0     - {{hitsCtrl.values.hits}}

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Although certain investors and a section of the stockbroking community were seen toasting the impending resignation of Securities and Exchange Commission (SEC) Chairman, Tilak Karunaratne on Tuesday and Wednesday by sending market indices up, the market dipped yesterday with thin volumes and poor turnover.

The main All Share Price Index fell 0.63 percent (31 points) to close at 4,908, while more liquid Milanka Price Index fell 1.28 percent (59 points) to close at 4,521. The new0 ly introduced S&P SL20 Index also fell 0.75 percent. Quite contrast to Wednesday’s Rs.1 billion turnover, yesterday’s market turnover stood at Rs.209 million.

“It takes some time for people to grasp the gravity of the situation. It’s not a joke when two regulators resign during the span of one year,” a stock market analyst told Mirror Business on grounds of anonymity.

However, some analysts pointed at negative corporate results as the key damper for the bourse to fall yesterday, more than the changes at the top positions of the regulatory body. The official deadline for companies to submit their June quarter performances ended Tuesday.

According to analysts, apart from the banks and several blue-chip companies, the majority of the listed firms have come up with negative performances for the quarter ended June 30, 2012, largely due to currency depreciations and increase in interest rates.

“It was foreign buying on John Keells that helped the market to go up, with a turnover exceeding Rs.1 billion on Wednesday and not the news of the resignation of the SEC Chairman, though some may like to think otherwise,” an analyst said.

Another analyst Mirror Business talked to noted that apart from the negativities stemming from Karunaratne’s resignation, the ongoing power cuts and strikes are also having a weighing on the investor confidence.

Tilak Karunaratne, during the early part of the week told media that he was under immense pressure to resign and stressed that it’s better to call it a day rather than fight with people who want him out.

Karunaratne assumed duties as the SEC Chairman in December last year. Since then, he was seen taking a tough regulatory stance against the so-called ‘pumping and dumping’ of shares and revived investigations which were in the backburner.

Meanwhile, unconfirmed reports suggested that Dr. Nalaka Godahewa, the present Sri Lanka Tourism Development Authority Chairman is tipped to be the next SEC Chairman, replacing Karunaratne.

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