Foreign outflow from Sri Lanka government bonds reverses in past week

May 24, 2019 (LBO) – Foreign investors moved back into Sri Lanka government bonds during the past week slightly reversing significant outflows that were experienced in the aftermath of the Easter Sunday terror attacks.

Foreign investors were net purchasers of Rs2.1bn (US$12mn) worth of Sri Lanka’s government securities during the past week. This comes on the heels of over US$100mn of outflows seen in the aftermath of the terror attacks.

Outflows from stocks on the week were muted with less than US$1mn worth of net foreign selling in the past holiday shortened week. Turnover at the Colombo Stock Exchange was extraordinarily slow during the past week, averaging just over US$1mn per day. Stocks were lower on the week, but not by much with less than 1% weekly losses on the major indices.

Markets are still getting their footing after the terror attacks and are finally starting to show some signs of stability. The Sri Lanka Rupee finished the week at close to Rs176 to the dollar. The currency has been relatively stable after the crisis with only minimal intervention by the Central Bank.