Editorial
The galloping stock market

The booming Colombo Stock Exchange (CSE) last week, after a two-year Covid-impelled silence, hosted its first news conference to share with the media what its chairman, Mr. Dumith Fernando, called a “fantastic story.” He was not exaggerating even slightly. The CSE’s performance last year was more that extraordinary by any standard with several historical highs established in all the indicators that matter. These included the heights reached by both the broader All Share Price Index (ASPI) and S&P 20 measuring the performance of the more liquid and better rated stock. There was also the daily average turnover, which even in highly depreciated rupee terms, that not long ago was computed in the millions is now running into billions. On top of that, there was the equity capital raising initiatives of companies seeking new listings on the trading boards of the exchange. Once upon a time, the CSE laboured might and main to persuade companies to list. But now, companies are jostling in the queue to obtain a quotation and these, without exception, have been several times over-subscribed on the opening day itself. Such successes mean millions, if not billions, of rupees of zero cost capital for newly listed companies.
The story goes on. There are those whispering or derisively labeling the current surge in the stock market as looking very much like something out of Ripley’s Believe It or Not – a “phantom market,” as the CSE boss put it, that is not supported by fundamentals. Such suspicion is inevitable in the context of a rapidly declining economy but with a paradoxically booming stock market running alongside. Fernando easily demolished that contention. There are many reasons, he said, for what the exchange calls the “quantum leap” in the market last year. Not the least among them is the plummeting deposit interest rates now down to single digits. People who once squirreled away their savings in banks or much higher interest paying but riskier finance company fixed deposits, have now found that the CSE has opened possibilities of much better returns in a scenario of plunging interest rates. No wonder then that a new class of investors, far removed from the business savvy high net worth persons who traditionally invested in what they judged as ‘good’ company shares, have become active in the stock market. The old guard looked for a steady dividend stream and capital appreciation in the longer term. Some of them did trade their shares making tidy, if not super, profits. But a large number held their stock over the longer term. The new investors are a different kettle of fish. They are looking for quick, often instant, trading profits, seldom investing in the longer term.
Today there are droves of what the market calls ‘retailers,’ – relatively small investors with little capital to play with, attracted to the CSE like moths to light. They see many possibilities to earn themselves some good money in the stock market and a record number of new investors, most of them 40-years or younger, have opened trading accounts. Today market players don’t have to visit share-broker offices and wrestle with all kinds of paper work to become active traders. They can do it all from their homes or offices armed with no more than one of those ubiquitous smart phones that many own today. Both brokers and the CSE itself are digtized and offer a modern trading platform nearly on par with what is available in more advanced markets.
Records established by the CSE last year includes the number of new listings up on the trading boards. Dumith Fernando said at the news briefing that last year, mainly in the latter part of 2021, there were as many as 13 initial public offerings. All of them attracted stunning investor interest being oversubscribed, sometimes several times over, on the opening day itself. Analysts confirm that many of these shares gained from their issue prices when trading commenced days later though there was at least one exception. But the general picture was instant profit for many small investors whose trading strategy is to take profit and invest funds realized in selling shares in new shares where they believe further profit is possible. They grumble about inadequate allocations due to the high demand for the shares on offer. But issuers generally tend to be fair to small investors.
Brokers say that the same share is often bought and sold, by a single punter, who will do multiple transactions in the course of a single trading day. Like betting on horses, gambling on a stock exchange is not without risk. But the fact that new players keep entering the market by the day suggests that the risk is much less than at the races and one player’s success attract many new players into the market. Where retailers are concerned, the herd instinct is very much in evidence with interest in a single counter drawing hordes of players into it, rightly or wrongly. The CSE website is full of notifications of the attention of listed companies being drawn into unusual trading activity in their shares. The inevitable response is that the company is unaware of any undisclosed price sensitive information that may have attracted unusual investor interest. Brokers say that low-priced shares may attract interest in a market where an upward trajectory as seen here was all too evident in recent weeks.
How long the carnival will last is anybody’s guess. But there are many putting their money where their gut instincts tell them that there’s more to be made.
Editorial
Kotmale bus disaster

We do not apologize for running several articles in this week’s issue of our newspaper on the bus tragedy at Garandi Ella last week that took 23 lives and left many more injured. The survivors included a baby girl who early reports said had been protected by her mother, shielding her against the pre-dawn cold, with her own body before rescuers reached her. This was corrected with later reports clarifying that it was not the baby’s mother, but a fellow-passenger on the bus, who was responsible for this act of kindness despite suffering a dislocated shoulder herself. The scale of the latest tragedy obviously merits the most intensive coverage and, more importantly, preventive action to ensure that road fatalities that occur with frightening regularity on our roads are reduced to the barest minimum.
The articles we run today range from a deeply researched piece, replete with facts and figures over a period of many years, by an Irishman, Michael Patrick O’Leary, who has been living here with his Lankan wife since 2002. The couple, coincidentally, lived not far from the scene of a similar accident when a privately-owned bus crashed into a canyon near Passara on the Bandarawela-Poonagala Road killing 10 and injuring 18. The writer says the driver has been speeding without regard for the terrain and foggy weather, A 16-year old girl due to sit her ‘O’ Levels that December was one of the victims. The second, a letter to the editor by a regular contributor who began his working life in the then CTB, a third from an engineering don from the Peradeniya University and a final piece from a retired public servant who says he’s no engineer but has long experience driving and riding vehicles.
President Anura Kumara Dissanayake reacted quickly to the accident by ordering the payment of a million rupees each to the families of the victims. There is no need to labour the fact that the payment of any amount of monetary compensation will not recompense lives taken away. But given current challenges of living all citizen bear, they provide some relief. The CTB itself has some of its own methods of compensation which will be payable over and above the relief ordered by the president. We do not know if insurance cover for risks taken by passengers on SLTB and private buses exist. If not, some such compulsory arrangements like those covering third party risks that owners of motor vehicles must take before driving on the roads is required. But, of course, the bottom line is all such charges will eventually be included in the fares that passengers pay public transport providers.
We Lankans must live with the reality that there will be no quick fix to the present road safety problems that have been gaining momentum in recent years. Not a day passes without details of road accident being reported on evening television news bulletins and the print media the following day. Remedial action is promised, most so when a major disaster such as last week’s occur, and numerous investigative and other committees are appointed to examine ways and means of future prevention. Little results thereafter both for lack of political and bureaucratic will and resource constraints. How often do we hear promises of banishing unprotected road-rail crossing until the next accident occurs at such crossings?
The acting IGP has appointed five-member committee chaired by a Senior DIG to investigate the incident. This committee has already visited the scene of the disaster and begun what has been officially described as a “comprehensive inquiry” covering all aspects of the accident aimed at identifying key contributing factors with a view to enforcing preventive measures. We’ve already been on that route before after previous disasters without any noteworthy remedies resulting. Then comes the next accident with consequent pontification and the merry merry-go-round begins rolling all over again.
Although the driver of the death bus survived the accident itself, he had not lived long thereafter. Whether any useful information, including any possible mechanical defect on the vehicle had been obtained or not we do not know. Apparently the conductor is alive but whether he will be able to say more than surviving passengers is questionable. Yet it has long been alleged that policemen, including senior officers. run private buses. If this is in fact true, it would explain why police checks on such vehicles, many of them driving like bats out of hell to reach the next bus halt before their competitors, are not as stringent as desired.
The anecdotal evidence strongly point towards possible driver fatigue being a cause for the recent accident. Whether this factor is taken into account when drivers are assigned long distance routes is a matter requiring urgent attention. Experienced drivers with good track records are obviously not dime a dozen and depot administrators must contend with their scarcity. There is no doubt that the country is burdened with an aging public transport fleet. It is well known that many of our buses are mounted on lorry chassis. Whether this compromises their safety is a matter needing investigation.
Other factors requiring investigation is whether the physical demands of the job tend to make particularly long distance drivers dependent on intoxicants including betel chewing to handle their demanding jobs. Are they tempted by overtime and other incentives to accept responsibilities they may not be able to bear physically?
Editorial
Horse-trading won’t help dispel chaos

Saturday 17th May, 2025
Leaders of the Opposition political parties are scheduled to meet today to discuss how to secure control of the local councils where they have obtained more seats than the ruling NPP. Today’s meeting is to be chaired by Opposition Leader Sajith Premadasa. Most Opposition parties have agreed in principle to form joint administrations in the hung councils, we are told. The NPP has been in overdrive to rally enough members to muster majorities in those councils. Horse-trading has become the order of the day.
Some NPP stalwarts have even approached the constituents of the SJB-led coalition in their efforts to form majorities in the hung councils, according to media reports. Leader of the Tamil Progressive Alliance Mano Ganeshan has said the NPP sought his support to gain control of some of the hung councils, but he turned down its request as a matter of principle. This shows how hard the government and the Opposition are trying to control the non-majority local councils.
The hung councils will continue to be in chaos whichever side gains control of them. Even if the NPP succeeds in raising majorities in those councils by winning over Opposition members or independent councillors, they may not be stable; there is no guarantee that defectors will not vote with their feet again, leaving the NPP without working majorities. A similar situation is likely to occur in the event of the SJB and other Opposition parties closing ranks to control the hung councils. All political institutions have earned notoriety for mass crossovers. The SLFP-led People’s Alliance collapsed during Chandrika Bandaranaike Kumaratunga’s presidency, in 2001, due to mass crossovers. It was also mass defections from President Mahinda Rajapaksa’s UPFA government that led to the 2015 regime change.
The question is why President Anura Kumara Dissanayake, who is also the leader of the NPP, and Opposition and SJB leader Premadasa have not met to discuss ways and means of navigating the hung councils out of the current imbroglio and making them fully functional for the benefit of the public. There is no reason why these two leaders who wrap themselves in the flag cannot sink their political differences and find a solution for the sake of the country.
The outcome of the recent LG polls indicates a growing public disillusionment with the government and the Opposition, albeit to varying degrees. Both the NPP and the SJB declared before the mini polls that they would never opt for joint administrations in local councils, but they have made about-turns, making a mockery of their pledges to the public.
The President and the Opposition leader should be able to negotiate, make compromises and adopt a workable solution to prevent chaos in the hung councils. It is incumbent upon them to bring order out of chaos at the grassroots level and ensure that the people’s interests are served.
Editorial
Arrogance of power

Friday 16th May, 2025
President Anura Kumara Dissanayake has begun to sound just like his predecessors, who succumbed to the arrogance of power and alienated the public. He has declared that he is ready to do everything in his power to enable the JVP-led NPP to secure the control of all local councils it has won with or without absolute majorities. Speaking at a ceremony to mark the 60th anniversary of the JVP, on Wednesday, Dissanayake said he would not hesitate to make use of the government’s two-thirds majority to achieve that goal.
The problem with power is that it goes to the heads of the wielders thereof and makes them take leave of their senses. Executive presidential powers can act like a mind-sucker, draining empathy, humility and rational thought from even the most grounded politicians. This has been our experience over the past several decades. Hence the aversion of the champions of democracy to the executive powers of the President. Even some defenders of democracy who secured the presidency with good intentions let their executive powers get the better of them.
In 1994, Chandrika Kumaratunga became the President, vowing to eliminate corruption (dooshanaya) and state terror (bheeshanaya), but her rule became a metaphor for political violence, election malpractices and corruption. The less said about J. R. Jayewardene, Ranasinghe Premadasa and Mahinda Rajapaksa, the better. President Maithripala Sirisena also abused his executive powers unflinchingly; in 2018, he sacked the UNF government, appointed Mahinda Rajapaksa Prime Minister, and then ordered the dissolution of Parliament in violation of the Constitution. Thankfully, a historic Supreme Court judgement restored the status quo ante.
Even non-elected President Ranil Wickremesinghe was intoxicated with executive powers from 2022 to 2024; he caused the local government elections to disappear and suppressed democracy. D. B. Wijetunga served as the President only for a brief period from 1993 to 1994 following President Premadasa’s assassination, and President Gotabaya Rajapaksa could not complete his term.
It is against this backdrop that President Dissanayake’s aforementioned declarations and warnings that border on veiled threats should be viewed. General Secretary of the ITAK, and former TNA MP M. A. Sumanthiran has torn into President Dissanayake for his declaration that he will use his presidential power to secure control of local councils which, he thinks, the NPP deserves to run, in all parts of the country. The ITAK apparently feels threatened as the NPP has won a considerable number of seats in the LG bodies in the North and the East. If only the ITAK/TNA had defended democracy so ardently while the LTTE, which did not have representation even in a local council, was controlling the North and the East.
It is a supreme irony that President Dissanayake has said that he will not allow anyone to trifle with the NPP’s popular mandate. He has either forgotten or chosen to ignore that popular mandates come to naught when governments fail and public resentment spills over onto the streets, with thousands of people baying for the rulers’ blood. Gotabaya, who won the executive presidency outright in 2019 and helped the SLPP secure a two-thirds majority in Parliament in 2020, had to run away and resign during Aragalaya in 2022 as he and his government mismanaged the economy. The JVP, which had only three MPs, at that time, almost succeeded in marching on Parliament. Now that a bad precedent has been created, the Presidents who fail in the future may have to hightail it like Gotabaya. It is popularly said in this country that no clay pot is too big for a wooden pole.
It is only wishful thinking that the NPP will be able to arrest the decline in its national vote share and shore up its support base by gaining the control of the local councils, where it has not obtained absolute majorities. Not even its hold on the executive presidency and Parliament has helped the NPP prevent a severe erosion of its vote base during the past six months or so. It finds itself in this predicament because it has failed to live up to people’s expectations. Instead of bellowing rhetoric and issuing warnings and threats, the NPP leaders must solve the burning problems faced by the public. They must at least try to make salt freely available at reasonable prices.
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