HR Sessions D Day For Bourse
The UN Human Rights (HR) sessions that opens in Geneva tomorrow, like the Sword of Damocles, hangs tenuously over the head of the bourse, a market source, appearing to bring sanity to the extraordinary gains made by the bourse in the past two days of trading, told this reporter on Thursday (February 23). Possible economic squeezes made on Sri Lanka by the island’s two biggest importers, the EU and USA to make Colombo to toe the line to launch investigations on alleged HR abuse especially during the latter stages of its war against terrorism may have a negative impact on the bourse, he said.
Nearly two years ago in August 2010 Sri Lanka lost the GSP + facility that had hitherto allowed it to export a number of items on a duty free basis to the EU, not least garments, its biggest export commodity, due to the aforementioned HR abuse conundrum and Sri Lanka’s resistance to investigations of such claims then.
As a result a number of garment factories moved over their facilities to Bangladesh (which enjoys duty free status in the export of garments to the EU), resulting in the loss of valuable foreign exchange and employment opportunities to the people of this country.
However that may be, the bourse, not least helped by price manipulations, made gains of 112 and 87 points at Wednesday’s and Thursday’s trading respectively, despite the exit of a number of retailers to the fixed income market due to rising interest rates, making that sector more promising for investments rather than the Colombo bourse.
Thursday saw 4.4 million shares of Aitken Spence being subjected to foreign buying on the back of local selling at Rs. 115 a share on a Rs. 3.7 billion turnover, believed to have had been helped by internal transfers of Hayleys and LB Finance, two companies controlled by business magnate Dhammika Perera which contributed Rs. 1.1 billion each to Thursday’s turnover.
Some 7.3 million shares of Hayleys at Rs. 150 a share and 2.8 million shares of LB Finance at Rs. 380 a share were transferred this way.
The bourse on the previous day Wednesday (February 22) too was the victim of manipulation by the manipulators, which saw it zoom by 112 points over the previous day’s close on a low Rs. 1.5 billion turnover, though overall market sentiment was positive, the source had then said.
“It may be difficult to catch and penalise the manipulators due to a lack of evidence,” he added. And on the flip side when the bourse becomes expensive like this, that deters foreign investments, he had also then said.
However that may be, the stockmarket recorded a net foreign inflow of Rs. 448.90 million on the back of a foreign purchase figure of Rs. 489.77 million at Tuesday’s (February 21) trading.
On the first market day (Tuesday) of last week too the bourse was up 3.34 points on a Rs. 1.1 billion turnover. Monday was a holiday for the bourse.