Monday July 23, 2018

Foreign buying in Sri Lanka bourse doubles in first half of 2017

Jul 18, 2017 15:12 PM GMT+0530 | 0 Comment(s)

  Year-to-date performance of ASPI and S&P SL 20 Indices (CSE)

ECONOMYNEXT  - Foreign buying of Sri Lankan stocks on the Colombo bourse in the first half of 2017 had doubled to Rs62.6 billion from the same period in 2016, the Colombo Stock Exchange announced.

It was an all-time high for foreign purchases in the first half of a calendar year, it said in a statement.

“Growth in foreign activity is certainly encouraging and goes on to indicate that foreign investors have identified an opportunity in the Sri Lankan stock market,” said Rajeeva Bandaranaike, chief executive of the CSE.

“Such interest is an expression of confidence in the future potential and growth of our market and makes a strong case for improved involvement among local institutional and retail investors.”

The statement said the Colombo Stock Exchange recorded a noteworthy turnaround in the first half of 2017, having started the year on the back of a slow-moving2016, with the growth spurred by foreign activity.

“The market in 2017 has garnered a keen interest among foreign investors, with net foreign inflows for 24 consecutive weeks recorded from the first week of February onwards,” the CSE said.

There was a net foreign inflow of Rs 23 billion so far in 2017, an improvement compared to previous years, which had an inflow of Rs 383.5 million in 2016 and an outflow of Rs5.3 billion in 2015.

The year 2012 holds the record for the highest ever net foreign inflow recorded in a calendar year, where net foreign inflows of Rs23.2 billion after the first six months went on to improve to a record Rs38.6 billion by the end of 2012, the CSE said.

Foreign investor contribution to total turnover in 2017 stands at 47%, an improvement in comparison with 42% in 2016 and 34% in 2015 and having crossed the 50% mark for the first time since 2008 in April this year.

“An attractive market valuation (P/E) compared to regional peers, growing corporate earnings among listed entities and a strong performance of the ASPI compared to leading indices are defining factors in attracting foreign investments to the Sri Lankan capital market,” the CSE said.

The Benchmark All Share Price Index (ASPI) has made consistent gains to record an 8.23% gain year-to-date, and as of 17th July stands at 6,741.07.

The S&P SL 20 index, which features the CSE’s 20 largest and most liquid stocks has also improved consistently, making a 11.03% gain in 2017 (year-to-date) and closing at 3,882.14 points as of 17th July.

“The growth of the indices in 2017 reflects a reversal of the declining trend from a 9.66% and 5.54% decline in the Benchmark ASPI index in 2016 and 2015 respectively,” the CSE said.

Overall trading activity has also improved in 2017, with the Daily Average Turnover recorded for 2017 (year-to-date) marking an improvement to Rs911 million from Rs737 million in 2016.
(COLOMBO, July 18, 2017)


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