Business

CSE’s UK purchases jump after roadshow, plummet after crisis

The Colombo Stock Exchange (CSE) saw a surge in investments from the UK following a roadshow conducted there in October, but the growth was cut short with the political crisis that hit in late October.

According to CSE data, the daily average purchases from the UK was Rs. 26.4 million for the year up to 5 October, but following the roadshow, this went up sharply to Rs. 56.7 million. However, from 29 October, the first market day after the political upheaval, the average daily purchases plummeted to Rs. 3.3 million, likely due to the uncertainty.
However, selling by UK investors has gradually increased this year, with the daily average being Rs. 45 million up to October. Soon after the roadshow, it had gone up to Rs. 56.8 million, and had increased even further after 26 October to an average of Rs. 69.3 million.

Speaking to The Sunday Morning Business CSE Chief Executive Officer Rajeeva Bandaranaike said that the sharp dip in purchases and the rise in sales could not be attributed to the political crisis.

“I don’t think we can attribute it to this crisis unless we personally talk to the UK investors and determine that; because I feel those decisions to exit were made before. These are not people who will look to enter or exit a market in a hurry. These are long-term investors. Some of the UK investors have been with us for 20-25 years. They have been through the ups and downs of Sri Lanka, including the war time. So I can’t say what we did in the UK was reversed by this.”

He added that the outflows and inflows were all part and parcel of a market, and that there was no cause for undue concern.

“When we do an overseas promotion, we have always seen a positive outcome. Generally, when you talk about foreign inflows and outflows, we talk about hot money flows. They come in and go out for various reasons. It can be for reasons totally unconnected to us. Funds actually started moving out early this year. These can be reversed at any time so we don’t need to worry too much.”

According to the CSE, a large gathering of institutional investors, based in London and Edinburgh, had shown a keen interest in investing in Sri Lankan equities while attending the Invest Sri Lanka roadshow held in October. Organised by the Colombo Stock Exchange (CSE) in association with the Securities and Exchange Commission of Sri Lanka (SEC), the roadshow saw the participation of a high-level Sri Lankan delegation representing the Government, the Central Bank, the SEC, CSE, listed companies, and stockbroker representatives.