Sri Lanka stock market rally driven by foreign buying
COLOMBO, Nov 17, 2014 (EconomyNext) – Sri Lankan shares are riding on a wave of new foreign buying which hit a new high in November, accounting for 44.4 percent of investments, the Colombo Stock Exchange said.
Foreign purchases in 2014 as at 14th November reached 95,083.8 million rupees, surpassing the previous highest foreign purchases of 92,425.5 million rupees in 2010, it said in a statement.
The CSE, up 27.7 percent this year, attracted new foreign entrants to the market in 2014 from locations where it held investor forums.
The biggest net foreign inflow was from Singapore at 5,264.1 million rupees in the January- October 2014 period followed by 4,622.5 million rupees from the United Kingdom and 1,844.3 million rupees from the United States.
There were also net foreign inflows of 242.5 million rupees from India, 19.3 million rupees from Hong Kong and 4.8 million rupees from the UAE.
"The strategy to conduct road shows in overseas locations has been successful in attracting foreign institutional investors to invest in the Sri Lankan capital market," the statement said.
Investor forums were held in Mumbai, Dubai, Hong Kong, Singapore, London and New York and purchases originating from these countries account for 60.3 percent of overall foreign purchases in 2014.
"The CSE also attracted new foreign entrants to the market, in 2014, from locations where these Investor Forums were hosted, and they accounted for 44.4%."
CSE chairman Vajira Kulatilaka said he believes investors entering the market are being cautious and basing their decisions on the fundamentals of companies.
"Foreign investors therefore have confidence in the liquidity of their investments, this buoyancy is being reflected in the foreign inflow over the past months."
CSE Chief Executive Rajeeva Bandaranaike said: "It is evident from the institutional and high-net worth investors who visited Sri Lanka and met with listed companies that the Sri Lankan capital market is gaining attention and proving to be an attractive investment destination for those looking at emerging and frontier markets."