Scandinavian countries invest 23-pct of total foreign purchases in 2018: CSE

May 30, 2018 (LBO) – Investment flows from the Scandinavian region to the Sri Lankan stock market have made a noteworthy improvement in recent years, the Colombo Stock Exchange (CSE) said.

According to the CSE, inward investments from Scandinavian countries have grown by 39 percent per annum (CAGR) since 2013.

“2.4 billion rupees in foreign purchases recorded from Sweden so far in 2018 marks a new high for investment flows into the stock market from the country,” the CSE said.

“The inflows recorded within the first five months of the year have bettered the previous high of 1.6 billion rupees recorded in 2014.”

Scandinavian countries collectively have invested 8.2 billion rupees in local equities in 2018 year-to-date, 23 percent of the total foreign purchases during the period.

Foreign purchases originating from Norway most recently recorded an all-time high, with 7.6 billion rupees worth purchases establishing a new record in 2017, during a year that established new all-time yearly foreign purchase records for 11 countries.

Sri Lankan Benchmark All-Share Price Index (ASPI) has also indicated relative stability in 2018 amid a noteworthy overall decline in frontier and emerging markets.

The MSCI Emerging Markets Index, which captures large and mid-cap representation across 24 emerging markets countries, has declined in 2018 by 1.88 percent.

The MSCI Frontier Markets Index, which captures large and mid-cap representation across 29 Frontier Markets countries, has declined by 8.37 percent – indicating the downturn markets have faced in 2018.

The CSE ASPI is presently in positive territory for 2018, with a positive year-to-date return of 1.32 percent.

The ASPI has remained positive during a period where certain main indices in other Asian markets have indicated negative returns.

“A feature of the Sri Lankan Stock Market has been the fact that our market is largely not sensitive to developments in global markets, which has often worked to our advantage,” Head of Market Development, Niroshan Wijesundere said.

“This unique feature and attractive valuations the market offers at present with a market P/E valuation of 10.83, which is significantly lower than our regional peers, is likely to further capture the attention of portfolio investors.”