say markets show hope despite war crisis
Despite fears that the market will face another slump such as the
one experienced in 1994 owing to the conflict, stockbrokers say
the present fall is a temporary development with hopes of the bourse
bouncing back and the return of investor Raj Rajaratnam reinforcing
is absolutely a temporary situation,” Tushan Wickramasinghe,
Managing Director, Lanka Orix Securities Company said. But he added
that the peace process, which is closely tied to the stock market’s
performance, has to be resolved soon and both parties are under
pressure internationally to start peace negotiations. “There
has to be a negotiation to the ethnic issue and there is considerable
international pressure for both sides to come to a settlement. When
there is an indication to a peace negotiation, the investor sentiments
will pick up and the market will perform,” he said.
Thursday, Raj Rajaratnam’s Galleon Fund bought 0.75 percent
stake in premier blue chip JKH totalling three million shares at
Rs. 118 each, which analysts said was a sign of investor confidence.
“This move by Rajaratnam is closely watched by other investors
and it is a confidence booster, which they will pick up,”
an analyst said. Immediately after presidential polls last year,
Rajaratnam sold out of Hemas, Lanka IOC and recently Sri Lanka Telecom.
Kumarasinghe, Head of Corporate and High Networth Markets, Asha
Phillip Securities Ltd said in the present volatile situation, there
is an opportunity for trading activity. “Chaos, violence and
ambiguity are part and parcel of the markets and we have to learn
to live with them. I feel that within this volatile situation, there
is an opportunity for trading,” he said.
stock analyst said the present situation is much better compared
to 1994, because ‘there is no actual war situation’.
“Both parties have indicated their desire for peace and are
in a negotiation mode, but this was not the case in 1994. So there
is still hope for the stock market and the negotiation sentiments
of both the government and the LTTE is at a much better level,”
Murugesu, CEO Lanka Securities said that if the ‘slump’
situation continues in the market, the profitability of the firms
and the market’s volume will decline, but it will be a temporary
setback. “It will not be as bad as the 1994 era and the market
will bounce back,” he said.