The misinformation campaign trail

People are today keenly following the US Presidential Election campaign. The highly publicised Presidential debates, the hundreds of negative ads placed by rival candidates, the accusations traded by respective campaign teams, and the multi-faceted analyses churned out by various overzealous experts are bombarding the US voters and global on-lookers in a sustained barrage.

The underlying motive behind these persuasive measures is to generate support for one or another of the candidates and no stone is left unturned in that endeavour. While the thrust and parry of these efforts are intense, both campaigns have somehow been able to keep the electoral battle on the basis of their party and/or personal lines, and have been cautious not to violate the US national interest or destabilise the US economy.

That is probably because if any indication appears that any one campaign team is acting against US national interest or is even perceived to be doing so, it can probably result in dealing a death blow to the campaign that violates such a hallowed principle.

While this globally visible campaign rages, another campaign of a different nature seems to be taking place in Sri Lanka.

That campaign is the vicious mis-information campaign that seems to have been launched by a group of persons who are systematically targeting the economy of the country.

This sophisticated operation is carried out by a few persons whose true motives are cleverly concealed in civilised language and who constantly hold themselves out as good governance enthusiasts, transparency experts and "independent" policy analysts.

However, what is not popularly known is that behind these civilised facades are persons who are actually known terrorist sympathisers, protectors of drug barons, company directors who have swindled thousands of depositors of finance companies, and corporate bosses who have been known for scams involving the undervaluing of company owned houses when transferring such properties to themselves. This dubious group is led by a vociferous anti-China MP, whose own academic prowess even at the Sri Lankan GCE Advanced Level has been found wanting.

A few days ago, the SEC introduced some measures to facilitate the share investment process in the country. Thousands of investors and a vast majority of brokers and other stakeholders hailed these reforms as essential improvements to the existing market practices. Market sentiment improved with these measures and Sri Lankan investors, particularly the small and medium scale retail investors, gained confidence.

The market indices moved on a healthy basis and on a rational track. After a long interval, local investors appeared to have joined the confident foreign investor community (which has invested more than $250 m in the CSE this year), in the investment process of the Colombo bourse. Finally, it seemed that local investors had begun to obtain a useful foot-hold in the Sri Lanka equity market.

This healthy trend, from the country's local investor point of view and the national interest, was unfortunately not one that was welcomed by the previously described group led by the vociferous anti-China MP. To disturb this forward movement, this group issued a statement through the former failed finance company director turned good governance enthusiast, that the new SEC directions were detrimental to investors.

The statement also claimed that investors had been rudely surprised and shocked by the SEC action and that the new rules would lead to insider dealing, market manipulation, front running and pump and dump practices.

Through the wide connections of the group, the horror-instilling statement received massive publicity and the stop-the-market campaign seemed (at least, in the short-term) successful, since it re-kindled uncertainty among retail investors.

Notwithstanding the horror stories circulated by this group (which group should now properly be identified as the anti-CSE mafia), savvy foreign investors continued to pick up good value stocks, leading to sustained foreign inflows into the market.

Fortunately for the market, the SEC Chairman issued a statement contradicting the anti-CSE mafia's negative pitch, and investors gained confidence to return to the market.

However, immediately on the heels of the SEC Chairman's clarification, the true motives of the anti-CSE mafia and the anti-China MP were exposed, when the MP openly supported the offensive statement of the former failed finance company Director, by alleging that the SEC Chairman was attempting to mislead the public.

By such remarks, the anti-China MP confirmed that there is now an organised and concerted effort to disrupt the stock market and to develop a negative sentiment.

This type of persons and groups who deliberately undertake mischievous misinformation campaigns must be held accountable, since these campaigns are impacting the economy and investors, dearly. However, until some action materialises, local investors should understand that this misinformation mafia intends to destroy the economy, to realise their own political aspirations.

Once local investors understand this, they will probably not fall prey to these machinations, learn to ignore this type of mis-information campaigns and take rational investment decisions, based on fundamentals, country conditions and the future prospects of the sectors of investment.

They need to remind themselves that if sophisticated global investors find the Colombo bourse attractive and make investments with confidence, Sri Lankan investors must not be discouraged by the wild accusations that are constantly made by desperate economic hit men, disguised as good governance activists.