The Colombo Stock exchange: The achievement in year 2009 and 2010 as the “World’s Best Performing Stock market” trimming up 124% and 96% respectively were groundbreaking moments since its systematic inception in 1984. The winning gap was quite a wide margin as opposed to markets in the United States and other developed economies, and was followed by Bangladesh (+83%), and several Eastern European countries such as Estonia( 73%) , Ukraine (70%) and also South American Markets Peru ( 65%) and Argentina(52%) during 2010.
Albeit impressive performance, Colombo bourse witnessed
continuous net foreign outflow…..
Despite such an achievement, Sri Lankan stocks observed the foreign investors going out of the market that resulted a “Net Foreign Out Flow” approximating to LKR 32bn in 2010 ( 2.86% of the market cap) that was higher than LKR 785mn ( 0.15% of the market cap) reported in 2009 .
Further, the aggregated “Net Foreign Outflow” for the current year 2011 has so far been LKR 16bn which is circa 0.76% of the market capitalization. This could be due to realization of profits, which earlier was not the “Right time to do so”, owing to the ethnic unrest prevailed, eventually scaled down the Local economy, whereby organizations suffered negatives in their performances.
Meanwhile it should also be noted that, recessionary condition in most of the large economies such as the United States, European region and the Middle- East further supported this jaded sentiments.