Retailers fuel CSE growth
Widespread investor participation and strong retail activity are pushing the Colombo stock market Indices up, analysts say.
This year, with the Colombo Stock Exchange (CSE) launching its central counterparty system, as well as the strong governance aspects in the market, foreign investors are very positive about the Sri Lankan share market, analysts noted.
While there is currently a foreign outflow and low foreign investor participation in the market, they said that setting the stage for them to return to the market is important.
They noted that with low inflation, increased revenues, the CSE is an attractive market. Low interest rates have backed corporate growth, they pointed out noting that growing spending as well as purchasing power is keeping the economy alive.
“There is also a lot of short-term trading happening, which is helping the index to rise,” one analyst said. He noted that the confidence in the government has supported the index to rise, but the financial performance of companies needs to be bolstered and sustained.
Analysts also said that when the market is at its peak, a lot of large parcels will trade hands.
Going forward, this will be widely done in the next few months, they added. Over 20 initial public coverage applications are now being processed in the CSE, and many retail as well as high-net-worth investors will come into the market, they said. The Colombo Stock Exchange closed up with the ASPI up 21.77 points in the four-day short week on Thursday. The S&P SL20 fell 2.46 points. The market turnover was Rs. 3.2 billion, primarily from financial stocks.
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