The first two days of the review period witnessed widespread profit taking by retail investors and to an extent by foreign investors. With renewed buying by foreign investment funds continuing to dominate the market, the ASPI gained nearly 20 points to level in the region of 640.
The economy is slowly but surely showing signs of recovery from the last two years of stagflation. On the whole the CSM is expected to appreciate to the region of ASPI 1000-1100 levels by year end. The high growth is expected in Plantation/Hotels and in the Export Manufacturing sector in the coming months. It is expected that the country's growth rate would be in the region of 5.5% for 1997.
With CSE commissioning the fully-automated trading system in the second week of May, it is to be seen, how it would affect the share prices due to the online-real time trading it brings into the market. Most probability, due to the increase in perfect information, price levels could get dampened, even though transactions are done much more speedily. With this system in force, short-selling, margin selling, such as in currency trading could be introduced, to increase volume and turnover levels.
Caution towards the positive indicators, comes from the expected hike in electricity charges by 30%, which would push most industries in the export sector to be less competitive in the world-market, therefore affecting the economy adversely. The possibility of a bomb-attack in Colombo is ever-present due to the North/East conflict, which would also be a negative factor.
Tea price-level increases due to decline in production in India/Kenya is a positive sign for the plantation sector companies, which could appreciate in value in the coming months.
Investments in stocks driven by foreign buying would be the best option for investors: DFCC/NDB/HNB/COMB/JHK/Agalawatte/Bogawanthalawa.
For high percentage returns very speculative investments: The Finance/Ceylinco Ins./CSF/Blue/K. TYRE/SEYB/EDEN/Hunas +/-1.50 DIMO/AMW/UML/CIC/BATA/CTC - +/-2.
Stocks that traded in large volumes in comparison to the issued number of shares: ACAP/AHOT/BLUE/SAMPATH/GRAIN ELEVATORS/AGALAWATTA.
Moves and counter moves were made following the recent interim order restraining Time Garments' directors from handling the company's finances. This was a result of an action instituted by shareholders N. K. Tejwani and P. N. Tejwani in the High Court of the Western Province.
Subsequently, on March 26, 1997, Time Garments (Pvt) Limited and Lakeside Garments (Pvt) limited together with G. N. Dhansingani, V.G. Dhansingani and L. G. Dhansingani filed a petition under section 213(3) of the Companies Act in the District Court to suspend the interim order issued.
After hearing submissions ex parte (without notice to N. K. Tejwani and P. N. Tejwani) the judge suspended the operation of the interim order.
In a counter move N.K. Tejwani and P. N. Tejwani filed a motion in the High Court stating that an interim order should not be suspended without notice to the original petitioners.
After hearing submissions, High Court Judge, P. Wijeratne, stayed the operation of the order made on March 26, 1997, by the District Court. In this scenario the interim order granted on March 14, 1997, is still in operation.
Bank deal settled
Last week's decision to allocate a forty per cent slice of a leading commercial bank to another commercial bank and a development bank ended weeks of speculation over the deal.
And, among the agreements reached was a decision that no branches of the commercial bank would be closed down, we hear.
Moreover, there would be no retrenchment of employees of the bank, it was decided. So, it appears that one bank has found a partner for it's progress, after all.
Cricket tourism
The statistics in the tourist industry are encouraging pointing to an approximately 25 per cent upturn in arrivals this year, provided no untoward incidents occur in the south of the country.
But those in the industry are always on the lookout for other avenues to boost the trade.
First, it was the concept of promoting Lanka as a convention centre. Now, some business houses have suggested "Cricket tourism."
Some more cricket
The prospoal is for a cricket tournament to be staged here, with special discount packages offered to tourists from Britain, Down Under and the subcontinent.
But the proposal is yet to be forwarded to the Cricket Board and what with a heavy cricket calender already finalised, it would take sometime for this idea to see the light of day.
Charter flights restart
But not all in the tourist trade are happy.
This is because the government has moved in to restrict charter flights from European destinations, to protect airlines operating in that region, including our own national carrier.
Charter operators say that when the going gets tough for the tourist trade, they are expected to sustain it, but when the industry perks up, they are unceremoniously dumped.
So, an appeal against the restriction is on the cards. And, some charter operators are so disgusted they are considering quitting from Colombo right now.
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