CSE requests and SEC approves week-long market closure | Daily News

CSE requests and SEC approves week-long market closure

Given the sudden increase in interest rates, the announcement of debt deferment, and other issues the Colombo Stock Exchange (CSE) has requested the Securities and Exchange Commission (SEC) to close the stock exchange from April 18 for 5 consecutive business days. The SEC has acquiesced to the request.

In a statement, the SEC noted, “It would be in the best interests of investors as well as other market participants if they are afforded an opportunity to have more clarity and understanding of the economic conditions presently prevalent, in order for them to make informed investment decisions.”

The move comes with the support of the Colombo Stock Brokers Association. Brokers have noted that if the market was to open prematurely there would be a flash crash in the value of equities thereby driving considerable problems for equities on margin financing further exacerbating the initial downward movement.

Brokers suggested that given the Monetary Boards’ recent adjustment, time should be given for rates (exchange and interest) to settle and the initiation of debt renegotiation to be made public.

They noted price stability in the future would outweigh the loss of price discovery in the current context.

Market participants tied to foreign investor interests noted that long market closures were unattractive to future foreign investment in the exchange. CSE offices will remain open in spite of the trading closure.


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