Sri Lanka stocks stabilising as PM says some terror suspects still ‘on the run’

April 24, 2019 (LBO) – Sri Lanka’s stocks opened flat on the second day of trading after the country’s devastating Easter Sunday terror attacks. Trading turnover stands at over Rs1.2bn, already surpassing yesterday’s total as the bourse tries to find its footing.

Most of the trading today has initially been in shares of market bellwether John Keells Holdings (JKH). JKH’s market cap is sitting just over US$1bn after a significant drop yesterday. Active trading in JKH has recently been a sign of foreign investor selling. Earnings from the company’s tourism sector are likely to be under pressure in the near term. Five-star city hotels, including one owned by JKH, were targets in the recent terror attacks.

Despite the foreign selling, savvy local investors has been picking up shares in the conglomerate over the last several months, an indication that local smart money sees significant value in the business.

Today’s flat open for the market is following an approximately 4% drop in the broader indices yesterday. Yesterday’s drop came on low volume of just over US$1mn. The low volume indicates that the market has still not settled after the drastic change in the investment backdrop following one of the largest acts of terrorism the world has ever seen.

Police today updated the death toll to 359 people from the attack. Details of the attack are still spilling out from news organisations throughout the world as the terror strike has for the first time put Sri Lanka on the global centre stage.

The Prime Minister of Sri Lanka, in a news conference last night indicated that there may be more suspects who are “on the run.” The Prime Minister of Sri Lanka, Ranil Wickremesinghe has been out front as the leader with regard to the crisis which occurred while the President was on a private visit to Singapore. He has been honest and contrite about intelligence failures while continuously updating the people on the situation. These intelligence failures have become front page news throughout the world.

The capital city of Colombo still remains very quiet with curfew being imposed during the night, and schools closed till Monday. Foreigners have been leaving the country with five star city hotels (the targets of the attacks) emptying out of guests. The most high profile target, the Shangri La Hotel, is closed entirely until further notice.

Dozens of arrests are being made under Sri Lanka’s temporary imposition of emergency regulations. According to sources in the security and political establishment, the threat level remains very high.