Colombo stock market remains an attractive avenue for investment
Thursday, 2 January 2014 00:00
The Colombo Stock Exchange (CSE) during 2013 provided an attractive prospect for investment with a 4.78% increase in the All Share Price Index (ASPI) and a 5.79% yield on the S&P SL20 Index (S&P 20).
The ASPI indicated the most notable increase in comparison to previous years, where 2012 and 2011 exhibited negative percentage changes of -7.1% and -8.5% respectively.
Bank interest rates decreased during the course of the year, following a directive by the Central Bank of Sri Lanka to tighten monetary policy; interest rates (Average Weighted Fixed Deposit Rate) have dropped from 13.21% on 31 December 2012 to 11.96% as at 29 November 2013.
The market witnessed certain selected stocks performing exceptionally, providing high yields to investors who diversified their investments over a range of equities. A total of 57 companies have given a total return in excess of 15% year on year for 2013 (with 26 companies giving a return above 30% and 31 companies giving a return between 15 to 30%).
The year also saw a total of Rs. 119.4 billion capital being raised through the stock market, with corporate debt amounting to Rs. 68.3 billion. The total capital raised during the year surpassed that of the previous year, which closed at Rs. 29.58 billion.
The CSE continued to attract foreign investors with a net foreign inflow of Rs. 34.1 billion (excluding the net flow for corporate debt), building on the net foreign inflow of 2012 at Rs. 40.3 billion.
This was supported by Sri Lanka’s higher positioning in regional capital markets, being one of the top performers within the region ahead of the Singapore Stock Exchange, the Bombay Stock Exchange and the Hong Kong Stock Exchange.
Capitalising on the attractiveness of the market, the CSE in association with the Securities and Exchange Commission (SEC) will host a Foreign Investor Forum in Singapore on 20 and 21 January 2014 to attract foreign institutional investors. A series of local and foreign investor forums are planned for the coming months, to reach out to international intuitional and high net worth investors, as well as local investors.
In a bid to encourage local investors and better educate existing investors the CSE has conducted a number of investor education programs throughout the island and will continue to educate the public on the various opportunities for investment available in the Sri Lankan capital market.
The Colombo Stock Exchange (CSE) operates the only share market in Sri Lanka and is responsible for providing a transparent and regulated environment where companies and investors can come together.
The CSE is a company that is limited by guarantee established under the Laws of Sri Lanka. The CSE is licensed by the Securities and Exchange Commission of Sri Lanka (SEC) and is a mutual exchange consisting of 15 Members and 14 Trading Members. All Members and Trading Members are licensed by the SEC to operate as Stockbrokers.