| ||
| ||
| ||
 |
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
Sri Lankan stocks plunge
COLOMBO, Sri Lanka (Reuters) -- Sri Lankan stocks dived 13 percent in their biggest ever fall on Wednesday after the president suspended parliament, throwing doubts on a peace process with Tamil rebels that had sown the seeds for an economic boom. Tourism and investment officials said the clash between President Chandrika Kumaratunga and Prime Minister Ranil Wickremesinghe would hit the island's economy by spreading uncertainty over a 20-month ceasefire with the Tamil Tigers. The stock market had been among the world's strongest this year before Kumaratunga's action on Tuesday, which included the sacking of three ministers. Wickremesinghe said the moves were aimed at undermining a peace process with the Tigers. "If the uncertainty prevails the market will have to re-rate downwards," said Sheyantha Abeykoon, an investment analyst at Eagle NDB Fund Management, which owns close to two billion rupees ($20.9 million) in stocks. "It will hit profits, especially in tourism, this quarter." Optimism over the economy, which the central bank had forecast would grow as much as six percent this year and 6.5 percent in 2004, had driven the market up 70 percent in 2003 through Monday. But a five percent fall on Tuesday and Wednesday's tumble cut its gain for the year to 42.47 percent. The key Colombo all-share index closed down 12.98 percent, or 173.25 points, at 1,161.29, in trade worth one billion rupees. Sri Lanka Telecom Ltd, the largest stock, slumped 23 percent to 19.25 rupees. Wednesday's fall wiped 39 billion rupees off the value of the market. The rupee fell 40 cents to 95.60 per dollar, but the bond market saw little trade. 'Panic'"It's panic mode," said Naren Godamunne, a broker at DFCC Stockbrokers. Some investors saw the slide as a buying opportunity: foreigners bought 138 million rupees of stocks and sold just 23 million's worth. Nalin Gunasekera, a 35-year-old investor standing in the hall of the Colombo Stock Exchange watching an electronic ticker, said he was looking to buy cheap. "Everyone is afraid to buy stocks," he said, surveying the funereal atmosphere on the trading floor. "I think it will recover." Others were less optimistic. A tourism official said visitors might cancel trips planned for November and December. Tourist arrivals rose 21 percent to 338,000 in the first nine months of 2003 compared to the year-earlier period. Mohan Thangarajah, an official at Mast Industries Ltd, a top garment exporter, said foreign buyers had called off a visit to the island. "If it drags on there will be an impact," said Arjunna Mahendran, the head of the Board of Investment, the government's investment promotion body. The government had been expected foreign investment to rise to a record $300 million in 2002, up from $242 million last year. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
