The absence of positive sentiment in the Colombo bourse has made retail investors to shy away from the market, the Colombo Stock Brokers Association (CSBA) President, Sriyan Gurusinghe said.
“If you look at the figures six months back, there were 30,000 to 40, 000 retailers either buying or selling shares. But now you hardly get more than 200 of them executing transactions,” Gurusinghe noted.
According to him, though rising interest rates and other weak economic fundamentals have been keeping the market dull for some time, the lack of positive sentiment has been the damper for the bourse to not to pick up steam.
“We need mass market participation for turnovers and volumes to go up. For that we need positive sentiment in the market. When you talk about stock markets, it’s all about sentiment,” Gurusinghe added.
When queried whether the recent credit relaxation by the Securities and Exchange Commission (SEC) would be of any help to harness positive sentiment, Gurusinghe opined otherwise.
“This is not what we have asked for. What the brokers wanted was not to deduct debtors from the net capital. But what the SEC has given is an extension,” he noted.
According to the new rules announced by the SEC on Monday, the stockbrokers were permitted to provide less to the debtors after stipulated settlement dates in contrast to the earlier rule of providing 100 percent to their clients’ debts. However, still, it was required to deduct debtors from their net capital.
Responding to queries about a meeting with the President along with SEC Commissioners, CSE Board Members and investors, Gurusinghe asserted that CSBA has not yet been invited to such a meeting. “Even I heard those rumours. But so far, we have not been invited either by CSE or SEC or the President’s House.”