Sri Lanka sees over 10-year high monthly net foreign inflow in Sept; forex crisis helps
ECONOMYNEXT – Sri Lanka saw its highest monthly net foreign inflows into stock market in more than 10 years in September as some foreigners converted their dividend payment into risky assets because they could not get dollars to repatriate due to forex crisis, stockbrokers said.
The island nation’s 4.3 trillion worth stock market saw 14.7 billion rupees ($40.8 million) net foreign inflow in September, its highest since March 2012 when Malaysia’s state investment arm Khazanah Nasional bought 8.8 percent stake in top Sri Lanka conglomerate John Keells Holdings <JKH.CM> for about $120 million.
“Some foreign investors are now reinvesting their dividend payments in the stock market because they are unable to repatriate their profits as soon as they might want to due to the forex shortage and no US dollar liquidity in the market,” a stock market analyst told EconomyNext.
“For small quantity repatriation, foreign investors get dollars. But that happens after more than six weeks.”
The market has seen net foreign inflow in 32 out of the last 34 sessions since August 15, Colombo Stock Exchange (CSE) data showed.
Dollars and other foreign currencies have dried in Sri Lanka amid an unprecedented economic and debt crisis.
The $84 billion economy has already declared sovereign debt default in April and said it has suspended all the foreign debt repayment with immediate effect from April 12.
Stockbrokers said Expolanka dominated the foreign buying this month. (Colombo/Sept30/2022)
