Sri Lanka’s stock exchange records all time high in foreign investments in listed companies
The Colombo Stock Exchange(CSE) has said last week in a statement that foreign investments in Sri Lankan companies listed on the Exchange in 2017 has hit an all-time high during a year, with Rs. 105.1 billion in foreign purchases so far this year, which has passed the record Rs. 104.7 billion in 2014.
The CSE has stated that the development follows signs of renewed foreign interest in the stock market in mid-2017.
During this period foreign buying has reportedly doubled to that in the first half of 2016 and recorded an all-time high for foreign purchases in the first half of a calendar year.
“Such foreign purchases have contributed to a net foreign purchase figure of Rs18.9 billion year-to-date, a figure that is substantial compared to foreign activity in 2015/16,” the CSE has stated.
“Growing foreign interest in the market has also contributed to a 30% improvement in the Daily Average Turnover, where the figure has improved to Rs955 million (year-to-date) from Rs737 million in 2016.”
The CSE said foreign investors have been quick to identify buying opportunities in Sri Lankan stocks.
“An attractive market valuation (P/E), encouraging performance among listed entities, dividend payments, and capital gains tax exemptions offered to share transactions are considered to be defining factors in attracting the level of foreign investor interest the market has witnessed in 2017.”
CSE’s Head of Market Development Niroshan Wijesundere has said that improving levels of foreign investor involvement has provided the CSE an opportunity to create awareness on the stock market across all investor segments.
The market continues to trade at a discount compared to regional peers and offers further opportunities for investors – with a market P/E recorded at 10.72 as of today and a majority of listed companies trading below book value, he has been quoted as saying.
“The macroeconomic outlook continuing to improve will also offer both foreign and local investors further confidence in the Sri Lankan stock market,” Wijesundere has added.
The CSE in association with the Securities and Exchange Commission of Sri Lanka (SEC) has resumed a concentrated effort to create awareness on the opportunities in the capital market in key foreign markets this year, through ‘Invest Sri Lanka’ Forums in Sydney, Melbourne, Auckland and most recently in New York.
Foreign Institutional Investors and Sri Lankans living abroad present at these events indicated a sense of optimism on the investment opportunities surrounding progressive economic reforms presently being implemented in the country, the CSE has said.
OSL take:
The statement by the CSE on the Exchange recording an all time high in foreign investments in to listed companies is a clear indication of signs of renewed foreign interest in the stock market. This positive move in the CSE indicates an opportunity for investors to invest in Sri Lanka’s stock exchange as well as entering into the country’s economy through more direct investments for better returns.
| Article Code : | VBS/AT/04122017/Z_1 |