Ceylon Finance Today: Proxies who have invested the black money of certain VVIPs of the previous regime in the stock market, now wanting to exit due to the regime change at the 8 January, 2015 Presidential Poll, may cause further downward pressure on the market due to such exits, sources told Ceylon FT.
The market, after the initial euphoria caused by the victory of the New Democratic Front's presidential candidate Maithripala Sirisena at the 8 January poll which saw the benchmark ASPI increasing by 108.19 points (1.44%) to 7,605.79 points and the more sensitive S&P SL 20 Index by a record 86.53 points (2.07%) to 4,272.50 points the day after the election, on Friday, 9 January, has, however, since fallen by 55.94 points (0.74%) and 7.65 points (0.18%) to 7,549.85 points and 4,264.85 points respectively, in the two days of trading that followed, since.
The fall of the S&P however, relative to the sharp decline in the ASPI, has been muted, signifying that the sharp drag on the ASPI in the last two days of trading as at date, was caused by speculative stocks rapidly losing steam, due to retailers who invested in such to make a quick buck, exiting at an equally faster pace.
Nevertheless, the bourse, in the three days of trading to date that has taken place since Sirisena's election to office on 8 January, has seen a net foreign inflow (NFI) of Rs 514.8 million, according to Colombo Stock Exchange (CSE) statistics, thereby once more taking NFIs into positive territory in the calendar year to date, with a figure of Rs 39 million.
However, it's the expected rapid exits of such proxy funds which may continue to be a drag on the bourse, sources said.
By Paneetha Ameresekere