Financial Times

A bull run on the Bull Run

By Random Access Memory (RAM)

Elation best describes the mood at the bourse and the corporate world in Colombo when the Colombo All Share Price Index hit the 1000-point mark last week. It is a pity that the PM and Minister G.L. Peiris could not be at the floor to celebrate the eventful event. It was left for the Minister of Finance and his deputy to do the honours. Minister Peiris may have been relieved not to be there for it is hard to eat one's own words that the bourse is not a good indicator of the economy's performance as the tea, garment and IT sectors are inadequately represented among companies listed. This was of course in different times, under different circumstances. The good professor turned politician is excused for his error in judgment for this is trivia, compared to the misdeeds many politicians get away with these days.

News of the stalled talks, sinking of the LTTE vessel, the Tiger's selective killing spree, slaying of provincial politicians and gundas, attempt to take the reins of the Lotteries Board and the PA/JVP alliance did not seem to affect investor confidence. The bull was on the run and is still running as most bulls do in the best of places. The deadline of the amnesty on ill gotten, hidden money was to end this month and perhaps was the most underplayed but critical factor of importance here. The government encouraged by the response has now extended the deadline till end August to declare the remaining spoils.

Since pragmatism is a virtue, the strategy to open up the "pettagamas" and numbered accounts is welcome. Just as it is unwelcome to have an underworld driven governance mechanism over legitimate governance, an economy driven by dirty money within a formal economy is most unwelcome. The tax net needed to be widened and reality had to replace pipe dreams. All successful crooks at a point in their lives want to be legitimate and respectable. In the world we live in money can indeed buy legitimacy and respectability under most circumstances.

We can expect to see the bull on the run through to August and must take caution not to read too much into all the hype. What needs to be done is to consolidate. The elation in Colombo must now be felt beyond the branch bourses in Kandy and Jaffna. These funds must squarely serve the people of Sri Lanka. Racecourses, nightclubs and casinos may make the fast bucks as the war did for many of those who ran guns. In the spirit of being pragmatic, one can even turn a blind eye on those who made a fast buck within the backdrop of the uncertain world of war.

Today there is new hope. The LTTE has reportedly changed its hard line on the peace talks. The supremo is quoted to have said they will not return to war. There remain the antics at establishing one party rule in the 'home land'. There is still a hard line on the government to work on so-called ground realities and not on blue prints and road maps in undertaking the reconstruction process. In spite of the rhetoric, there is some impact of what the big US Deputy Secretary of State has to say about all of this. Then there are the lessons to be learnt from the UK, which we are busy learning.

While all these will help the bull to run on, we need to focus strongly on unity from within the government since government consists of the executive and the legislature. Since one hand cannot clap, there will need to be more and more hands extended. It will do well for corporate leadership to focus once again on bringing the two hands together. For ignoring reality may break the bull's knees.

The established corporate outfits that benefit from the performance at the bourse must now take a long-term view. They must invest not only to make direct money profit but profit for society as well. The right mix of vision with values can make the bull run, and keep on running.