Thursday, September 11, 2014
The JOKE that is the Media Release of the CSE on reaching 3 TRILL!
Whilst the market value of the CSE increased to 3 trillion rupees is a feat, one must be cautious when reading anything the CSE puts out.
They are terribly anxious to show their performance in good light, but just look at the net inflows from overseas year to date 2014, appalling not even US$250M which is not even pea nuts, which makes the rise completely speculative lacking in fundamentals.
The road shows that the PDF boast about have hardly caused a ripple and the figures above corroborate this as money has been flying out of the market with foreign funds taking profits, rather than replacing with new funds, except for just two that have invested in this year on a positive note.
One must remember in such an illiquid market where speculators are rampant, they do not kill the goose that lays the golden egg in a declining interest market that under normal circumstances should see a far greater rise in share prices along with a commensurate increase in market capitalization.
Let us NOT forget that illiquid shares in very high market cap companies such as CT (Ceylon Tobacco) and Nestle skew the market right royally, for no benefit to either the CSE or the Sri Lankan economy as they repatriate all their profits back to the home base!!!!
Let’s just remind the intelligent investor that HOGWASH created by the CSE itself is detrimental to the overall objective of preserving sanity, and intelligent analysis both which are lacking in the media statement.
When asinine and foolish comments are made by supposedly respected people who run the CSE, the whole country’s reputation is put on the line.
I would sincerely ask both Vajira Kulatilleke the Chairman of the CSE and Rajiva Bandaranayake the CEO, to get a grip on themselves and stop making a fool of themselves, and try to increase active new investor participation and a greater level of companies to join the CSE instead of numbers trying to leave or being gobbled up on consolidation. This can only stop if they take active steps to stop insider trading, and persuade shareholders to considerably draw down their controlling shareholdings to give liquidity a boos and widen share-ownership!
There will be no new entrants until that is done