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Sri Lanka's equity markets would see a positive inflow by the end of the year as better pricing attracts investors, deputy Central Bank governor Dharma Dheerasinghe said.
So far this year Sri Lanka's equity markets have seen a net outflow of 150 million dollars.
"By the end of the year there will be a surplus inflow, even through the stock exchange," Dheerasinghe said.
"We have got some commitments at the moment, those will come.
Longstanding foreign investors sold out when Sri Lanka's stock prices rose steeply giving an opportunity take profits, he said.
Analysts have also said that purchases by state controlled funds gave liquidity to foreign investors to exit. In the past, foreign investors who wanted to exit had to sell mostly to other foreign investors as the domestic market did not have enough capacity.
Colombo's stock exchange is a top performer even now, and is in positive territory though most other markets have retreated amid global uncertainty.
The Colombo Stock Exchange has said its benchmark index was up 2.2 percent compared to Bangladesh which was down 28.7 percent, Hong Kong down 22 percent, India down 19 percent.
There has however been concern that the market has risen largely due to deliberate cornering and pumping of thinly traded small cap stocks.
However prices of Sri Lanka's most liquid large capitalized companies, which are foreign investor favourites, have fallen since late last year.
"The world situation is now fragile," Dheerasinghe said. "We are working with some other investors, not from Europe and US; they will be mainly from Asia."
Investment bankers have said that a part of a 70 million dollar initial public offer of People's Leasing Company, Sri Lanka's largest leasing firm will be placed abroad.
Dheerasinghe said with corporates and banks set to raise capital abroad about a billion dollars in equity, debt and foreign direct investments would come by the year end.
Sri Lanka's rupee had come under pressure in recent months and the Central Bank has sold down reserves to maintain the exchange rate around 110 rupees to the US dollar.
Dheerasinghe said reserve sales were to facilitate imports, especially capital goods that were necessary to keep economic growth up. Sri Lanka is expecting the economy to grow 8.3 percent in 2011, he said.
Peg defence has created liquidity shortages pushing interest rates up. On Wednesday the Central Bank started daily auctions to inject cash to the banking system.
http://www.lbo.lk/fullstory.php?nid=584797091
So far this year Sri Lanka's equity markets have seen a net outflow of 150 million dollars.
"By the end of the year there will be a surplus inflow, even through the stock exchange," Dheerasinghe said.
"We have got some commitments at the moment, those will come.
Longstanding foreign investors sold out when Sri Lanka's stock prices rose steeply giving an opportunity take profits, he said.
Analysts have also said that purchases by state controlled funds gave liquidity to foreign investors to exit. In the past, foreign investors who wanted to exit had to sell mostly to other foreign investors as the domestic market did not have enough capacity.
Colombo's stock exchange is a top performer even now, and is in positive territory though most other markets have retreated amid global uncertainty.
The Colombo Stock Exchange has said its benchmark index was up 2.2 percent compared to Bangladesh which was down 28.7 percent, Hong Kong down 22 percent, India down 19 percent.
There has however been concern that the market has risen largely due to deliberate cornering and pumping of thinly traded small cap stocks.
However prices of Sri Lanka's most liquid large capitalized companies, which are foreign investor favourites, have fallen since late last year.
"The world situation is now fragile," Dheerasinghe said. "We are working with some other investors, not from Europe and US; they will be mainly from Asia."
Investment bankers have said that a part of a 70 million dollar initial public offer of People's Leasing Company, Sri Lanka's largest leasing firm will be placed abroad.
Dheerasinghe said with corporates and banks set to raise capital abroad about a billion dollars in equity, debt and foreign direct investments would come by the year end.
Sri Lanka's rupee had come under pressure in recent months and the Central Bank has sold down reserves to maintain the exchange rate around 110 rupees to the US dollar.
Dheerasinghe said reserve sales were to facilitate imports, especially capital goods that were necessary to keep economic growth up. Sri Lanka is expecting the economy to grow 8.3 percent in 2011, he said.
Peg defence has created liquidity shortages pushing interest rates up. On Wednesday the Central Bank started daily auctions to inject cash to the banking system.
http://www.lbo.lk/fullstory.php?nid=584797091
