CSE: Foreigners ‘activated’ by Aussie roadshow
Foreign inflows mainly from Australia have led to a marked improvement in trading during April following the recently-conducted ‘Invest Sri Lanka’ investor forums in Australia, the Colombo Stock Exchange (CSE) says.
Australian inflows have contributed a total of Rs. 487.62 million since the events in Australia. The CSE in April saw keen interest among foreign institutional investors where net foreign inflow as at April 23 was Rs. 14.3 billion year-to-date in 2017, up from Rs. 383.5 million in 2016.
Overall foreign investor activity has seen a rise in 2017, with a net foreign inflow of Rs. 16.5 billion, a vast improvement compared to previous years, which recorded an inflow of Rs. 383.5 in 2016, the CSE said in a statement.
Consistent foreign inflows have been a standout feature of the performance of the market in recent weeks, with net foreign inflows for 21 consecutive trading days by the end of trading on Friday, April 21 barring the first week of early May. This slump in foreign buying this week analysts say is due to profit taking and is an expected trend.
The key is to work out which funds are actually investing in the CSE these days, an analyst said noting that if its larger emerging markets funds, the Indian sub-continent funds or frontier funds that are buying, then the CSE is really up on the deal.
CSE officials said that those who’re investing are not ‘new’ funds, but they were inactive for the ‘longest’ time.”They have been inactive, but they were impressed after the Australian roadshows,” a CSE official told the Business Times.
Dilshan Wirasekara, CEO First Capital noted that stocks offered good value, but some stocks are underpriced when compared to PE multiples regionally.
Commenting on the development, Head of Market Development, CSE Niroshan Wijesundere stated, “We are pleased to see the events in Australia having a positive effect on the turnover flowing in from the country. This is consistent with a trend that we have experienced with foreign investor forums conducted in the past, where these events almost immediately rejuvenate the interest in the Sri Lankan capital market. The presence of the stock brokers who travelled with the delegation to Australia also played a vital role in following up and securing such investments.”