November 28, 2019 (LBO) – The Colombo Stock Exchange (CSE) finished a busy day today with trading activity that has been rarely seen in recent years. The stock market registered trading turnover of Rs2.8bn (US$15mn) with the indices finishing up roughly 1.5% on the day. There was broad based trading activity across many stocks.
The recent uptick in trading on the CSE has been driven buy local buyers who have offset net foreign selling of Rs9bn for 2019 up to the end of last week. Today’s rally also saw foreigners exiting with net foreign selling of approximately Rs800mn.
Some market insiders contend that much of the recent trading activity is likely credit driven and unless there is significant foreign buying, the CSE will not be able to sustain its recent momentum.
The market appears inexpensive with stocks in aggregate trading at an 11 PE and price to book ration of 1.15. Economic growth should also pick up in the coming quarters with an expected recovery from the Easter Sunday terror attacks and the recent fiscal stimulus that ignited todays rally.