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Colombo world’s fourth worst bourse


Sri Lanka’s stock exchange is just ahead of troubled European economies Greece and Spain in terms of year-to-date performance, a recent survey conducted by a US based investment group shows.

According to an analysis by Bespoke Investment Group published last week, the Colombo Stock Stock Exchange (CSE) is the world’s fourth worst performing stock exchange so far this year, with the All Share Price Index down 18.95 percent year-to-date, only ahead of troubled Greece (down 19.14 percent) and Spain (down 22.22 percent). Ukraine has the worst performing bourse which has fallen 31.02 since the beginning of this year.

According to the table below compiled by Bespoke Investment Group, the US has taken the lead amongst G7 countries with a year-to-date gain of 5.15 percent.

“Up until last week, Germany had the lead, but with a YTD gain of 3.87 percent, Germany ranks second in the G7.  Italy is by far the worst performing G7 country at the moment with a YTD decline of 14.10 percent.  France and Canada are both down roughly 4 percent, while the UK is down 2.01 percent.  Japan is up slightly at 1.34 percent.

“Vietnam holds the overall lead with a 2012 gain of 20.97 percent.  Pakistan ranks a close second at +20.34 percent.  While Greece and Spain continue to dominate the negative headlines, the Ukraine is actually the worst performing market year to date with a decline of 31 percent, Ouch,” the investment group said.

“Looking at just the BRICs, India has the lead with a 2012 gain of 7.91 percent.  China ranks second at +4.39 percent, while Brazil and Russia are both in the red.”

Since the end of thirty year conflict in 2009, the Colombo Stock Exchange had held the position as the best and second-best performing stock exchange in the world. But the bourse fell 8.5 percent last year after massive growth rates of 96 percent in 2010 and 125.3 percent in 2009.

A series of regulatory measures to cool down the exchange has seen the correction continue in to this year as well. Regulation has also seemed to have put the brakes on market manipulation and the kind of activity that earned the bourse the reputation for being a den of gamblers and thieves.

The Colombo Stock Exchange fell last year when watchdog the Securities and Exchange Commission (SEC) imposed price bands and commenced investigations on suspect trades. Influential lobbying with the President resulted in then Director General of the SEC Malik Cader being removed and appointed to the Treasury and as a result, SEC Chairperson Ms. Indrani Sugathadasa resigned soon after ‘as a matter of principle’.

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