CSE sees net foreign inflows crossing LKR 28 billion mark
The Colombo Stock Exchange (CSE) saw net foreign inflows exceeding the LKR 28 billion mark to date, which is a clear indicator that investor confidence in non-nationals has been reinforced.
Since 2012, this is the second time in the CSE’s history that net foreign inflows topped the LKR 28 billion mark.
The record net inflows up till now is perceived as a great achievement considering the fact that in 2016 net inflows amounted to only LKR 400 million, and in 2015 a net outflow of LKR 5.4 billion was recorded.
As of June, 9 net inflows totalled LKR 20.3 billion meaning that the LKR 28 billion mark was surpassed within three months. Total year to date net foreign inflow for both the primary and secondary market amounted to LKR 40.6 billion, as against last year’s recorded LKR 2.2 billion, and an outflow of LKR 5.4 billion in 2015 and a net inflow of LKR 21.7 billion in 2014.
The CSE’s all-time high net foreign inflow is an admirable record of LKR 38.6 billion achieved during the 2012 Bull-run in the market.
However, many capital market analysts have complained that the sustained foreign craving for listed Sri Lankan equities is a revelation of the unpredictable “wait and see” attitude of local investors which exposes their relatively low confidence in the market.
On the other hand, though foreign optimism supersedes that of the locals, some analysts perceive the renewed interest of local investors after the Finance Ministry reached a decision not to impose additional taxation on share trading as a positive.
However, on August 28, 2017 turnover hit a five and half month low of LKR. 210 million.
OSL TAKE:
Foreign investor optimism is a positive sign that foreigners perceive Sri Lankan companies as sound investment opportunities, signalling the green light to other potential investors that Sri Lanka is a place where sound business partnerships and opportunities can be sourced.
| Article Code : | VBS/AT/30082017/Z_3 |