Market continues to slide down for no rhyme or reason. Practically all the stocks, blue chips as well as popular volatile stocks are grossly oversold and undervalued. Interest rates are showing signs of coming down as evidenced by the downward slide in Treasury bill yields at the last two auctions. CBSL did not raise their policy rates at their last monetary policy committee meeting and they are most likely to start easing rates from either June or July. Corporate results for the last financial year reaching the market currently are very encouraging. However the market remains sluggish with indices sliding down slowly on surprisingly low daily turnovers. What really ails the market is the absence of retailer interest. Big players coming and executing a crossing here and there is not going to change the depressed mood in the market. In fact it was one such disastrous crossing that worsened the market situation recently and triggered an knee jerk reaction from the regulators.
It is time for the brokers to move out of their cozy air conditioned offices and luxury cubicles and hit the streets looking for new retailers It is not that hard since the market penetration is very low in Sri Lanka. We have very much less than 0.5% of the eligible (over 18’s) population participating in stock market trading as against 30% to 70% in developed country markets. Brokers should not depend on the CSE and the SEC to do all the promotional work, a strategy which has proved to be ineffective in the past. Instead they should lobby to get a bigger share of the commission charged from market players for use in aggressive marketing campaigns and new branch openings.