Frida Ghitis writes: Reporting today from deep inside Sri Lanka, where the term “stock market” means little to millions of rural residents harviesting tea leaves on verdant estates, selling bright-red sweet ramboutan by the side of the narrow roads that cut through the jungle, or watching their backs for occasional stray wild elephants that can wreak havoc in the village or the farm. Before taking to the road, I spent some time in the capital Colombo, where I visited the not-so-bustling trading floor of the Colombo Stock Exchange.
The CSE shares a floor with precious stone sellers in Colombo’s ultramodern World Trade Center. The gem shops glittered with the mesmerizing “cat’s eye” stones, along with the stunning sapphires and rubies that caught Marco Polo’s eye during his travels to old Ceylon. The Stock Exchange, on the other hand, was not shining quite so brightly on the day I paid a visit.
The CSE features little in the way of visible frenzy. The room is rather small, with casually attired market specialists looking at computer terminals and talking to each other under a large electronic board flashing share prices.
It was not a good day. It was an even worse week. It has, however, been a wonderful year for the Colombo All Shares Price Index. The index has soared more than 40 percent in 2010, one of the world’s best performers. Optimism is fueled by the end of the war between the government and separatist LTTE, the Liberation Tamils, who sought an independent state in the north, and waged a vicious war from almost three decades. That war now appears to have been definitively won by the central government.
That relatively-rational exuberance came to a cold stop last week, when authorities imposed a limit of ten percent on daily stock moves. After the announcement many traders decided to tie their sandals and go home in disappointment. The market lost about ten percent in the days following the trading band rule.
Sri Lanka has relatively open rules for foreign investors, as well as a presence in the US through ADRs. We’ll keep paying subscribers posted on attractive investing opportunities. Now news from Switzerland, Brazil and Britain.
