Last Updated : 29-07-2014 17:44

 
 

Bourse bleeds

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The Colombo bourse continued to bleed as both indices dipped over two percent during yesterday’s trading, amidst talks of over-regulation by the regulator, margin pressure, interest rate hike and gloomy global scenario.

The benchmark, all Share Price Index (ASPI) lost valuable 121 points (2.47%) and closed at 4. 813 while more liquid Milanka lost 99 points (2.23%) to close at 4,342. The turnover for the day was Rs.534.3 million.

According to brokers, margin pressure was visible during trading yesterday as many investors were forced to sell their stocks to meet up settlements.

“So far we have seen small investors bowing down to margin pressures. But now we are seeing even some big investors who are under huge margin pressure forced to sell,” a broker on the grounds of anonymity said. “Earlier we used to find sellers for buyers. But now the whole thing is reversed. Now we have to find buyers for sellers,” he added.

However, some brokers were of the view that the recent regulations by the Securities and Exchange Commission (SEC) have killed market sentiment. “Again, the SEC is trying to over-regulate the market by applying all these new rules which are seemed quite unnecessary. What they should look at is the proper implementation of existing laws,” a stockbroker stressed. He noted that the investors at Colombo bourse get easily carried away by good news as well as bad news, and come up with extreme reactions.

He also added the investor who has invested in fundamentally sound shares is not bothered by temporary issues that are taking place either in the market or the economy.

“This is quite evident if you look at the fundamentally strong shares in the Colombo bourse. They have been affected very little by the present market sentiments,” he said.

However, according to brokers, the only silver lining for the Colombo bourse is the continuous foreign buying that is taking place in the market.

Yesterday, foreigners were net buyers with a foreign inflow of Rs.212 million.

 
 

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