• 1: Increased activity in foreign investment inflows over the last 18 months
• 2: CSE expects foreign investors following completion of debt restructuring, rating upgrade
• 2: Restricted default status currently hindering further foreign investment

The Colombo stock market expects foreign investors to return to the market following the completion of the debt restructuring and the expected rating upgrade, according to Colombo Stock Exchange (CSE) Chairperson Dilshan Wirasekara.

Speaking to Bloomberg Markets on Monday (23), he said that the CSE expects foreign investors to return to the stock market sooner than later.

He added that before 2018, there was a 50/50 contribution from foreign and domestic point of view for turnover which then changed due to the 2019 April bombings and Covid-19 as foreign investors pulled out of the country over macroeconomic concerns.

He said that in 2021, the market was 95% dominated by domestic players, while the trend has slowly but surely recovered to about 85/15 contribution level.

“We have seen increased activity in foreign investment inflows over the last 18 months, however, definitely not back to the levels of 50/50,” he added.

Wirasekara said that it was partly due to the country’s restricted default (RD) status as foreign funds, portfolio managers are not going to allocate investment flows to a country when it is in RD status.

The main index at CSE rose by 2.14% to 11,334.12 while the S&P SL20 rose by 2.41% to 3,236.79 recording a turnover of Rs. 2.01 billion with 95.9 million share volumes trading.