The Colombo Stock Exchange’s (CSE) rally by foreign investors looks dicey now that a state of emergency has been imposed by the government on Tuesday, some stock analysts say.
“From Tuesday onwards some funds were trying to book profits on selected blue chip blocks such as John Keells Holdings and Commercial Bank,” an analyst told the Business Times. According to him JKH saw a Rs. 5 drop on Thursday to Rs. 160.50 and stood at Rs. 163 on Friday. He added that calls to sell certain blocks escalated on Tuesday after the unrest at Teldeniya on Monday.
A stockbroker ‘strongly’ disagreed with this statement saying that foreign funds don’t decide on short term incidents. “They aren’t exactly panic retailers.” He added that CSE has witnessed worse times during the war and when Galleon Fund of Raj Rajaratnam pulled out it was much worse.
Dimantha Mathew, Head of Research First Capital told the Business Times that foreign participation was on a worrying note. He said that foreign participation had significantly have come down since Monday, but they aren’t panicking essentially because they are positive on CSE. “But they are cautious. By tomorrow they’ll return.”
By Friday, foreign buying had slowed down, another analyst added. “They are taking a cautious stance. If this situation continuous they may adopt a wait-and-see stand.”
These sentiments arose just after two major investor forums showcasing the CSE. Early this month ‘’Invest Sri Lanka’ investor forum was organised by the CSE in Singapore which saw leading Asia–based institutional funds and other investors across multiple industries. The other was ‘CSE – Tundra Fonder Sustainability Forum’ which the CSE in collaboration with Tundra Fonder hosted on Monday in Colombo.