Notwithstanding the slowdown in global markets due to number of political and economic dilemmas around the world, the Sri Lankan Bourse remained attractive and continued to improve the foreign inflows and retail market activities last week.
This trend however reversed in the next month with foreign investors booking corporate profits earned in 4Q2013/3Q2014, resulting in higher foreign outflows in February.
In the wake of heightening political tensions in the Eurozone and a slowdown in China’s economic activity, raising concerns over the performance of global markets, European and Asian markets fell during the month of March.
“However on a positive note, the ASPI was successful in maintaining a steady path relative to other global markets in March 2014 mainly due to net foreign inflows returning to the market. Accordingly, on a month-to-date basis, the market received foreign inflows of Rs. 243.7 million in March, a significant improvement from the Rs. 5.1 billion outflow seen in the previous month but on track to reach the Rs. 1 billion net foreign inflow seen in January 2014,” First Capital Equities added.
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First Capital Equities said investors who focused on investing in Government securities switched their interest to equities as a result of the continuous drop in Treasury Bill rates by 20, 30 and 10 bps respectively in maturity periods of three months, six months and one year.
“Moreover the 4Q2014/1Q2015 corporate results are expected to trigger healthy margins which are supported by the improvement in consumer spending as a result of the recent development in Sri Lankan economy. Hence, the Sri Lankan Bourse can be recognised as an unharmed investment platform for both local and foreign investors which will provide sustainable returns,” First Capital Equities said. With regard to the question of whether the volatility in global markets is impacting the Sri Lankan stock market, First Capital Equities said the Sri Lankan Bourse rallied at the start of 2014 with the ASPI rising above Asian and European market indices on the back of high volumes of foreign inflows.
This trend however reversed in the next month with foreign investors booking corporate profits earned in 4Q2013/3Q2014, resulting in higher foreign outflows in February.
In the wake of heightening political tensions in the Eurozone and a slowdown in China’s economic activity, raising concerns over the performance of global markets, European and Asian markets fell during the month of March.
“However on a positive note, the ASPI was successful in maintaining a steady path relative to other global markets in March 2014 mainly due to net foreign inflows returning to the market. Accordingly, on a month-to-date basis, the market received foreign inflows of Rs. 243.7 million in March, a significant improvement from the Rs. 5.1 billion outflow seen in the previous month but on track to reach the Rs. 1 billion net foreign inflow seen in January 2014,” First Capital Equities added.
www.ft.lk
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