‘As prices are low, CSE ideal place to invest’

H.D.H Senewiratne

The Colombo Stock Exchange (CSE), is an ideal place to invest as most of the prices of its stocks are attractively low. However, given the current situation, the inflow of foreign investments have reached high, sources said.

“Since the market was attractively low at present, it is quite encouraging for local and foreign investors to invest in companies, as most of the companies have performed reasonably well during the year,” Director, Bartleet Religare Securities (Pvt)Limited Angelo Ranasinghe said.

He said that during the year, the foreign buying net flow had been Rs 35 billion and they were quite active than local investors.

The reason being that the Sir Lankan economy was resilient to any condition and it was an excellent opportunity for investors to invest their money in stocks. However, when local investors were not amply active, it was the need of the hour to promote them, he said.

According to Ranasinghe, the positive sentiments and good corporate results, coupled with foreign buying, was helping the market to perform well during the year.

Therefore, foreign buying on the CSE to date this year, stands at a net inflow of Rs. 37 billion.

The highest ever mark the ASPI has reached was 7811 points, way back in February 2011.

Lanka Securities (Pvt) Limited, Head of Sales and Marketing Eardley Kern, said that the market has only good things to offer with around100 companies shares being below 10 times of the price earning ratio with most of the stocks also traded in below the net asset value.

He said that when the market is fundamentally strong, locals tend to sell their stocks, while foreign investors were accustomed to buy.

Therefore, it was the need of the hour to counter that trend to yield higher returns than the current bank interest rate, he said. In the market the All Share Price Index target had been 9,000 by the end of 2014. Sentiment are likely to improve gradually and pick up steam by 2013, in view of the prevailing uncertainty in global economies and high domestic interest rates,” it noted.

The report cited improving foreign investor confidence based on attractive valuations, particularly, when against regional emerging and frontier markets and strong economic growth prospects as a basis for its positive forecast.