Sri Lanka's stock market regulator on Thursday removed the 10 % price band rule which had been imposed last year after the market showed a lot of volatility, with the move expected to bring some long term stability in the Colombo bourse. "This should stimulate the market in the long term. Regulation is good but to a point," one broker said, adding however that this may not restore retail interest since fixed income instruments are giving better returns.
He said foreign funds are seen active that this could see bigger interest from this sector while noting that liquidity could improve. The Securities & Exchange Commission (SEC) said in a statement that the Colombo Stock Exchange which runs the country's only stock exchange was directed to lift the price band imposed on certain stocks owing to high volatility and volumes. It said these stocks would continue to be monitored and the price band re-imposed if necessary.