From Bears To Bulls: Can The Stock Market Tackle The Invisible Gorillas?
By W.A. Wijewardena -October 8, 2012
Dr. W.A. Wijewardena
The bull-run in the CSE
It was a happy migration from bears to bulls in the Colombo Stock Exchange or CSE in the post-war period beginning from mid-2009. The indices in the Stock Exchange, which remained in a stagnant position for many years, got a sudden boost after the end of the war.The All Share Price Index or ASPI, which had fallen to the 1,503 level at the end of 2008 from 2,541 from 2007, rose by more than 100 per cent to 3,386 by end 2009, the increase occurring after the defeat of the LTTE in May, that year.
Then, the move was one way in 2010, raising the index by almost another 100 per cent to 6,636 by the end of the year.
During this period, it was bulls that had reigned in CSE. The bull reign came to a sudden stop in 2011 with the ASPI falling to the 6,074 level by the year-end. The bears that took over the reign of CSE in 2011 were equally active as their predecessors and they pretty soon brought down the ASPI by 22 per cent to the 4,700 level by June 2012.
The bears were rather active till end August, but with the transfer of power to a new team of regulators in theSecurities and Exchange Commission or SEC in early September, their power was decimated within days. The bulls took the reign of CSE once again. Accordingly, by early October, the level of the ASPI at closer to 5,900 was just short of 175 units to beat the level it had at the end of 2011.
The bears were rather active till end August, but with the transfer of power to a new team of regulators in theSecurities and Exchange Commission or SEC in early September, their power was decimated within days. The bulls took the reign of CSE once again. Accordingly, by early October, the level of the ASPI at closer to 5,900 was just short of 175 units to beat the level it had at the end of 2011.
Has the bull-run refuted the doomsday preachers?
The new bulls that had invaded the market forcefully filled the market once again with hopes as it had filled it in mid 2009 when Sri Lanka won the terrorist war conclusively.
The writers on the new development in CSE were so jubilant that they very quickly penned that the rising trend in CSE was a refutation of those who had earlier predicted certain doom of the market when the top regulators were changed by authorities in an apparent political intervention in the market to their dislike.
The writers on the new development in CSE were so jubilant that they very quickly penned that the rising trend in CSE was a refutation of those who had earlier predicted certain doom of the market when the top regulators were changed by authorities in an apparent political intervention in the market to their dislike.
What goes up should come down one day and vice versa
