Monday, 18 January 2021 19:17

Colombo Stock Exchange gains momentum amidst gambling allegation ’

Amidst warnings of the repetition of stock market manipulations alias pumping and dumping in 2011-2013 era of Rajapaksa regime by opposition politicians and financial analysts, The Colombo Stock Exchange (CSE) is fast seen becoming a ‘gambling joint’

In the year 2020 on the EPF investment in the stock exchange was Rs 84 billion and the losses as of September 2020 was Rs 20 billion.

Though some people consider share market investment as quick bucks, if we look at the 2011, 2012 and 2013 stories we need to be extremely careful as there may be a repetition of that same story of the past regime now, Former State Minister of Finance Eran Wickramaratna warned.

The stock market analysts also said that the Colombo Stock Exchange (CSE) is fast seen becoming a ‘gambling joint with pump and dumping becomes the order of the day.

This was brought to the notice of readers quoting analysts by a week end newspaper claiming that high-profile traders with a lot of cash in hand and no place to park it are ‘playing’ the market, at the risk of denting the good sentiment in the CSE.

It is important for retailers to be educated and invest in the market rather than cry spilt milk like in 2011 –’13 era when retailers got caught in the pump and dump cycle, the news paper said quoting the analyst.

Certain stockbrokers noted that there is almost Rs. 1 billion in fresh cash coming into the market every day and that day traders are making 10 per cent a day in the CSE.

They make a bit of easy money, and then invest a bit more and this trend snowballs. It is important to remember that this is a demand/supply situation where supply will become low and share prices will drop, an economist pointed out.

However the Securities and Exchange Commission of Sri Lanka (SEC) in a statement welcomed the record-breaking performance of the Colombo Stock Exchange (CSE).


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