The Colombo Lies Exchange

1334847089000 » Tagged as: ASI , COMB , CTC , sec

Well before the Colombo Stock Exchange ended trading today, I predicted that tommorow's headline in Sri Lankan business news sections will be:

'market cheers removable of the price band' which of course is a huge lie

 Lanka Business Online, a journal that's miles ahead of the likes the Financial Times which has already published their report on the market hasn't used that as the headline. But the first paragraph goes like this:

 Sri Lankan shares closed sharply higher Thursday after regulators lifted price restrictions imposed to curb speculation, brokers said.

What the brokers and the LBO haven't mentioned is that the price band hasn't been enforced for months. In fact unless I am mistaken the price band has not been used since the former director general of the Securities Exchange Commisions Malik Cader was fired last November. Secondly the announcement was made at least two hours after the opening and by that time the All Share Price index had already gone up by more than 1% . If the market rose because of this news, the news was leaked. Let us hope the new SEC director general will investigate.   The climb was largely due to the fact that the Ceylon Tobacco Company (CTC) the second largest in terms of market capitalization surged upwards by more than 15%. At one time the ASI had gained 86 points and 50 of those points were due to CTC! The second largest contributor at the time was Commercial Bank (COMB) which ended the day at 105.10 up 3.24%   Yes, my friends this is the same company that tried to issue debentures and could not get even a single application for them. It's typical of the CSE that the price should go up when such an announcement is made.  It's true that shares sometimes do go up on bad news and go down on good news, but that's only when the prices have moved in anticipation of the news. Nothing like that happened in the case of COMB  
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