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| Sunday, 23 May 2004 |
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| News Business Features Editorial
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CSE's annual review 2003 : Highest levels ever in the history of share trading in Sri Lanka The Colombo Stock Exchange (CSE) in the year 2003 witnessed an unprecedented 12 months of growth, reaching the highest levels ever seen in the history of share trading in Sri Lanka, according to CSE's Annual Report for that year. Subsequent dips in the market have corresponded with political uncertainty, but the environment that lead to the resurgence - the need of business to get back to the business of investing - remains, the report continues. Short term uncertainly about the future should not undermine the fundamental aspiration of our business community to expand and flourish, it says. Ultimately, the perception in the mind of every investor will dictate whether the market performs or not. Optimism breeds success, pessimism negates it. If we all believe that every day of peace in Sri Lanka brings us closer to a time when the economy can reach its true potential, the sooner that time will arrive. "CSE is committed to creating the market to reach that potential." The development of the market requires a healthy mix of investors taking diverse views, CSE chairman, Eraj Wijesinghe says in his review. The year 2003 began on a negative note with global and local developments threatening to retard the gains made in 2002. War in the Middle East, the suspension of the peace talks between the Sri Lanka government and the LTTE were events that would normally have created negative sentiment in the market. However, an early end to the war in the Middle East and the investor confidence that a resumption of hostilities between LTTE and government was unlikely set an environment conducive to the development of the capital market. This together with the proposed international aid package at the Tokyo meeting, worth US $4.5 billion, helped boost the market to unprecedented levels, Wijesinghe continues in his report. During the period January to October 2003 the All Share Price Index (ASI) appreciated by 73.7 percent and Milanka Price Index (MPI) by 87.9 percent. The ASI and MPI reached its highest ever levels of 1,423.5 points and 2,584.2 points in October 2003. The Fortune Magazine in its 29th September 2003 issue recognised Sri Lanka as the second best performing emerging market for the period January to September 2003. The political events in November 2003 however checked the growth momentum of the market. The ASPI and MPI closed the year recording a growth of 30.3 percent and 38.1 percent respectively. Primary market activity was strong in 2003 with listed companies sourcing funds amounting to nearly Rs 13 billion during the year, surpassing previous records. Funds raised by listed companies as a percentage of estimated private sector investment in 2003 exceeded 3 percent, small by comparison, but a substantial improvement on the capital raised by listed companies in the past few years, Wijesinghe says. The performance of the market over the year was due to a combination of factors ranging from better economic performance to investor perceptions of economic and political events, Wijesinghe, continues. These factors created investment opportunities for both long term investors and those with a more speculative outlook. The recent high levels of activity witnessed in the local retail sector even during depressed conditions is indicative of the growing maturity in this segment of investors, the CSE chairman, says in his report. |
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