EPF marks its re-entry to Colombo Stock Exchange

Colombo (News 1st): The Employees’ Provident Fund, marked its re-entry into the Colombo Stock Exchange last Friday (May 17). Sources from the stock exchange confirmed to News 1st, that the Employees’ Provident Fund, marked its re-entry to the Colombo Stock Exchange on the 17th of this month, with the purchase of 55 million shares of Dialog Axiata PLC, through three crossings, for a consideration of Rs. 495 million. Since 2015, the EPF had refrained from making new investments in the CSE as the fund failed to generate substantial returns. Adding to the concerns was the alleged involvement of the EPF in the infamous treasury bond scam that resulted in the Central Bank suspending the fund’s secondary market activities. A 2016 report of the Employee’s Provident Fund revealed that a loss of Rs. 8449 million was incurred after EPF funds were invested in the stock market in 2015 and 2016. In 2015, the fund had incurred a loss of Rs. 4310 million after investing in stocks. In the year 2016, the loss stood at Rs. 4139 Million. Meanwhile, trading at the Colombo Stock Exchange ended on a positive note today (May 22). The all-share price index gained 4.40 points to close at 5,295.68 and the S & P Sri Lanka index gained 6.95 points to close at 2,473.10. Were the funds of the EPF invested in the Stock Exchange as a temporary performance enhancement or in simpler terms an artificial gain? According to the CSE daily report, domestic purchases stood at 122,699,176 shares, while 92,691,713 shares were reported as domestic sales. Further, foreign purchases of shares stood at 4,732,332, while foreign sales stood at 34,739,795. Does this not suggest that the foreign outflows continue? As depicted in the past, will these transactions at the CSE turn out to be cases of pumping and dumping? It is common knowledge that the EPF funds do not belong to the government, but to the people. If EPF funds are used for pumping and dumping, shouldn't criminal charges be filed against those responsible for the losses incurred?