Foreigners are Active in CSE. But Local Investors/Traders are Inactive

Rajaraam

Rajaraam

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Dear freinds,
I just compared some trading figures in january 2011 and january 2012 and found that foreign investors/traders are still very active and their trading share in the CSE has tremendously increased compared to trading values of local investors/traders. Therefore present situation would be changed positively if CSE could regain the confidence of the local investor/Trader. We have nothing to worryabout foreign investor/Trader since they are still satisfatorily active in the stock market. I would like to share some of my findings with you;

Turnover,
January 2011 =Rs. Mn 75,993
January 2012 =Rs. Mn 19,102
ASI - January 2011 =6657-7174
ASI - January 2012 =6074-5693
Foreign Buy-Jan 2011 =Rs. Mn 4657
Foreign Buy-Jan 2012 =Rs. Mn 3745
Foreign Sell-Jan 2011 =Rs. Mn 7545
Foreign Sell-Jan 2012 =Rs. Mn 3274
Foreign Net-Jan 2011 =Rs. Mn(2888)
Foreign Net-Jan 2012 =Rs. Mn 471
Local Buy-Jan. 2011 =Rs. Mn 71,336
Local Buy-Jan. 2012 =Rs. Mn 15,357
Local Sell-Jan. 2011 =Rs. Mn 68,448
Local Sell-Jan. 2012 =Rs. Mn 15,828
Foreign Buy/Turnover % Jan.2011=6.1%
Foreign Buy/Turnover % Jan.2012=19.6%
Local Buy/rnover %Jan.2011 =93.9%
Local Buy/rnover %Jan.2012 =80.4%

From the above figures we can note that foreign buying has increased from 6.1% to 19.6% ( as a % of turnover)from jan.2011 to Jan. 2012 despite the huge fall in total turnover from Rs. 75,993 Mn to Rs. 19,102 Mn from Jan. 2011 to Jan. 2012. CSE is managing even at present level due to comparatively higher trading by foreign Investors/traders. CSE and the government should take all appropriate action to regain the local investors' confidence in order to make our stock market more active.
Another important point is as stockmate stated many times, when the index increasing from 6657-7174 in Jan. 2011 foreiners have sold more than purchasing. And now in Jan. 2012 they buy more and sell less. May be they feel that current price levels are good to buy for them to make a reasonable profit in the coming months.

Rajaraam

Rajaraam

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Dear freinds,
I just compared some trading figures in january 2011 and january 2012 and found that foreign investors/traders are still very active and their trading share in the CSE has tremendously increased compared to trading values of local investors/traders. Therefore present situation would be changed positively if CSE could regain the confidence of the local investor/Trader. We have nothing to worryabout foreign investor/Trader since they are still satisfatorily active in the stock market. I would like to share some of my findings with you;

Turnover,
January 2011 =Rs. Mn 75,993
January 2012 =Rs. Mn 19,102
ASI - January 2011 =6657-7174
ASI - January 2012 =6074-5693
Foreign Buy-Jan 2011 =Rs. Mn 4657
Foreign Buy-Jan 2012 =Rs. Mn 3745
Foreign Sell-Jan 2011 =Rs. Mn 7545
Foreign Sell-Jan 2012 =Rs. Mn 3274
Foreign Net-Jan 2011 =Rs. Mn(2888)
Foreign Net-Jan 2012 =Rs. Mn 471
Local Buy-Jan. 2011 =Rs. Mn 71,336
Local Buy-Jan. 2012 =Rs. Mn 15,357
Local Sell-Jan. 2011 =Rs. Mn 68,448
Local Sell-Jan. 2012 =Rs. Mn 15,828
Foreign Buy/Turnover % Jan.2011=6.1%
Foreign Buy/Turnover % Jan.2012=19.6%
Local Buy/rnover %Jan.2011 =93.9%
Local Buy/rnover %Jan.2012 =80.4%

From the above figures we can note that foreign buying has increased from 6.1% to 19.6% ( as a % of turnover)from jan.2011 to Jan. 2012 despite the huge fall in total turnover from Rs. 75,993 Mn to Rs. 19,102 Mn from Jan. 2011 to Jan. 2012. CSE is managing even at present level due to comparatively higher trading by foreign Investors/traders. CSE and the government should take all appropriate action to regain the local investors' confidence in order to make our stock market more active.
Another important point is as stockmate stated many times, when the index increasing from 6657-7174 in Jan. 2011 foreiners have sold more than purchasing. And now in Jan. 2012 they buy more and sell less. May be they feel that current price levels are good to buy for them to make a reasonable profit in the coming months.

Hawk Eye

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Dr.Senthilvel also on the buying .

FXX

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For the last 12 months ASI have gone down around 2000 points and getting close to 600 Day Moving Average as well so one can argue we are close to end of the market fall. But other than increasing foreign buying there are no more positives yet

15%only

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Turnovers are very low and this means that some key players are not yet in. Could EPF, local funds, etc... problem is no point in one fund "buying" if others are going to sell. Looks like extending credit gives brokers the "right" to sell what shares when they want to. This is on cx account since interest is paid till the sale and broker anyway gets the comission. With extended credit buyers should be able to negotiate with brokers to hold for "1 month".

Those who buy long term like the "overseas investors" should do well. ...Can we stop saying foreigners - it could be local citizens with "funds" overseas. Ahhh, now we have to consider saying "trading agents" instead of the "brokers"!!

Last edited by 15%only on Wed Feb 08, 2012 12:58 am; edited 1 time in total (Reason for editing : spelling)

CSE.SAS

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Please note the foreign sales/purchase were targeting only 3-4 companies, mainly banking, diversified and beverages only.

worthiness

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Correct...Majority of foreigners target strong blue chips. Also noted that the frequency of their in & out of the market happens at faster rate than before..mean quick profit taking.
Data given above shows that locals are still inactive..Disparity of income distribution in the country is becoming higher & higher..So I believe the contribution from normal investors does not have an impact on the market..HNWI & the institutional fund managers can do the real impact....

greedy007

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Basically most of the local investors burned their fingers.(not all)
So it will take some time to stabilise.
Some of the HNWI playing the game very tactfully because their investment in CSE not affected due to 2011 crash.

mra

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If our fortune tellers were active in 2011, predicting whats going to happened in 2012, they could have advised for foreigners to enter in 2012 and buy on low prices and earn commission from them fro the advice. hehe Laughing

mono

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most of the local retailers are exiting the market. I guess it i'll take some time before they are done selling. These days no one seems to be in a rush to buy shares.

Market Sucker

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mono wrote:most of the local retailers are exiting the market. I guess it i'll take some time before they are done selling. These days no one seems to be in a rush to buy shares.

yes dump money will be departs from fools,let them to sell and get vanished from CSE.

Rajaraam

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Dear friends,
Have you noted foreign investors deaings in February(5 market days) so far.Their buying value so far is around Rs. 1167.8 Mn where as the selling is Rs. 1149.8 Mn. The net foreign inflow is around Rs. 18 Mn. Important point is foreigners contribution towards the turnover is 23.6% compared to 4.7% in last year for the same period. In 2011 up to 8th feb.( 5 market days)total foreign buy value was Rs. 986.7 Mn and foreign sell value was Rs. 1,220.9 Mn. Accordingly, in february this year so far foreign buy value is higher than the last year figure and foriegn share in the turnover has increased from 4.7% to 23.6%. Therefore we dont need to worry about foreign invetors (as they are actively involved in stock trading in CSE than we expect). CSE,SEC, stock brokers and all other parties who are responsible should immediately take suitable action to find out reasons for why local investors/traders are leaving the market/minimising the dealings and take remedial measures to regain their confidence in investing in CSE. If not we cant expect a good share market in Srilanka for many years ahead.

chamith

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Rajaraam wrote:Dear friends,
Have you noted foreign investors deaings in February(5 market days) so far.Their buying value so far is around Rs. 1167.8 Mn where as the selling is Rs. 1149.8 Mn. The net foreign inflow is around Rs. 18 Mn. Important point is foreigners contribution towards the turnover is 23.6% compared to 4.7% in last year for the same period. In 2011 up to 8th feb.( 5 market days)total foreign buy value was Rs. 986.7 Mn and foreign sell value was Rs. 1,220.9 Mn. Accordingly, in february this year so far foreign buy value is higher than the last year figure and foriegn share in the turnover has increased from 4.7% to 23.6%. Therefore we dont need to worry about foreign invetors (as they are actively involved in stock trading in CSE than we expect). CSE,SEC, stock brokers and all other parties who are responsible should immediately take suitable action to find out reasons for why local investors/traders are leaving the market/minimising the dealings and take remedial measures to regain their confidence in investing in CSE. If not we cant expect a good share market in Srilanka for many years ahead.

From 1st of January 2012 to today 08/02/2012, net foreign buying stands at 489 mln lkr.

mono

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well for the last two and a bit weeks m number is at 827mn

Rajaraam

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As at today during Feb 2012, Foreign buy has gone up to 29.3% of Feb. turnover compared to 8.3% for the same period in 2011.So far foreign and local investors buy values are given below;

Feb 2012 Turnover Up to 17 th Feb. = Rs. Mn 14456
Foreign buy during this period = Rs. Mn 4244(29.3%)
Local investors buy = Rs. Mn 10212(70.7%)

Feb 2011 Turnover up to 18th Feb =Rs. Mn 45575
Foreign buy during this period = Rs. Mn 3797(8.3%)
Local investors buy = Rs. Mn 41778(91.7%)

We can note foreign buy has gone up in both ways by valuewise and as a % of turnover. Sad thing is Local buy has drasticaly fell from Rs. Mn 41778 in 2011 to Rs. Mn 10212 in 2012. However with the recent relaxation of some rules we could expect an increase in local buying value as well during the next few weeks.

Kumar

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I got a different idea on this foreign sales and purchase.
If we noticed 2010 and 2011 net foreign sales and purchase there was a net out flow.
Now may be they are thinking right time to come in.

Rajaraam

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Kumar wrote:I got a different idea on this foreign sales and purchase.
If we noticed 2010 and 2011 net foreign sales and purchase there was a net out flow.
Now may be they are thinking right time to come in.

Kumar, that is what I wanted to idicate by figures. If this is corrrect market will continue in upward trend. Isn't it?

sriranga

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Rajaraam wrote:

Kumar wrote:I got a different idea on this foreign sales and purchase.
If we noticed 2010 and 2011 net foreign sales and purchase there was a net out flow.
Now may be they are thinking right time to come in.

Kumar, that is what I wanted to idicate by figures. If this is corrrect market will continue in upward trend. Isn't it?

Foreigners are Active in CSE. But Local Investors/Traders are Inactive Fsp11

Seems to be the foreigners seeing the market condition in a favourable way, which we need to consider.
(May be we need to wait?)

Slstock

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Rajaraam wrote:

Kumar wrote:I got a different idea on this foreign sales and purchase.
If we noticed 2010 and 2011 net foreign sales and purchase there was a net out flow.
Now may be they are thinking right time to come in.

Kumar, that is what I wanted to idicate by figures. If this is corrrect market will continue in upward trend. Isn't it?

Once the market was overvalued with PE of 20+. A big market correction was needed and it happened. Along with mistakes SEC made we have to admit they did some good to take some steps to prevent a bubble( we discussed the good and the bad they did before. Let not argue again).

How much more correction is needed is the question? But as I asked before is CSE that bad to deserve a further drastic drop?

Yes there is a temporary volatility in Sri lanka due to balance of payment , fuel hike , currency devaluation, expropriation etc etc. So in panic people can bring market down more. But in reality we have had about a ASI 35 % drop from the top. Market PEs considering forward year end earnings should be around 10-11 now( to be calculated). Also most companies have corrected sometimes over 2010 July prices. Most of the overvalued junk + even good fundamentals have come down to earth ( sometime more than needed for a fair valuation) . Are all our companies performing that bad? I agree there are a still few high cap and some others counters trading at more than their fair value ( CARS, BUKI are main culprits. Sorry CARS/BUKI lovers but look at their valuations with regarding to present earnings) If these get individually corrected the market PE will be even lesser.

I do not see why foreigners should not find market more and more attractive in the coming months. Right now to me market is getting close to be fairly valued. We already see foreigners slowly entering again .
Thats should give us some thing to think about. I read Indian Stock market has also seen considerable inflows last week . But due to world and (short term ) local economic issues some might still feel they should take back seat to wait for an even better time to enter. The "safe havens" in rising deposit and bond interest rates is not helping CSE either.

I am in no way trying to predict market behavior in short term. It can drop further if people panic and rules maker make bad policy decisions. Also it can rise due to sudden cash influxes. But my hope is that market remains range bound around 5000-5400 for some time to stabilize. It is better to stabilize than huge spikes or huge plunges both of which can be detrimental for a stable market.

sapumal

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If government can bring whole extra charges to 1% of the transaction, that will be a good move

Rajaraam

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During the last 12 market days from 8th Feb. todate every day a foreign net inflow has been recorded. Total foreign buy value during this period was Rs, Mn 5019 where as the foreign sell value was only Rs. Mn 2110 resulting in a Net inflow of Rs, Mn 2909.Some members repeatedly said that wise foreigners are selling and srilankan who doesn't know anything about share trading are buying in this bear market without proper studies. But Now otherway around. Foreigners are continuesly buying and our ppl are selling. So coz foreiners are wise(as some ppl repeatedly said) now we have to follow wise foreigners and buy.Isn' i it ?

Last edited by Rajaraam on Tue Feb 28, 2012 6:22 am; edited 1 time in total

sriranga · 22 Foreign net inflow tops Rs. 3 billion Tue Feb 28, 2012 3:57 am

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Locals may be having fears of the Geneva outcome but the very investors from the West are continuing to be bullish with net inflow topping the Rs. 3 billion mark by yesterday.

Foreigners were net buyers to the tune of Rs. 224 million increasing the net inflow under just two months of the year to Rs. 3.16 billion. Though small it is a record high and significant since for three years beginning 2009, the Colombo Bourse has seen a consecutive outflow.

Among stocks favoured by foreign funds yesterday were Ceylon Tobacco (Rs. 63 million), Sampath Bank (Rs. 61 million), Aitken Spence Hotels (Rs. 52 million) and Royal Ceramics (Rs. 16 million) whilst there was also buying in to JKH and Chevron Lubricants.

As part of trading Captains were largely on the selling side of Sampath as well as Commercial Bank whilst state funds EPF and ETF were active yesterday as well collecting banking and other blue chips.
Sampath, CTC, Aitken Spence Hotel Holdings and Royal Ceramics figured among the top five turnover contributors.

Analysts said average local investors were either selling out or on the sidelines awaiting the developments of the Human Rights Council sessions on Sri Lanka at the United Nations in Geneva whilst others blamed the inaction to problems associated with the Automated Trading System (ATS) version seven, as well as profit taking.

Ending 11 successive positive sessions, the stock market dipped by 1.6% yesterday whilst turnover was Rs. 616 million.

“The fall is due to profit-taking, but a number of investors have complained they can’t access the system via the internet after the stock exchange upgraded its trading system,” Acuity Stockbrokers Prashan Fernando was quoted as saying by Reuters.

Arrenga Capital said the bourse lost steam after seven consecutive days of gains with the approach of the month end margin calls and profit taking by investors.
The benchmark index had jumped over 550 points during the past seven days. The selling pressure during the day led to a decline in activity levels while the turnover was boosted by 3 off-market deals in blue-chip counters.

“In line with our expectations the sharp gains in the past week built up selling pressure with some investors looking to take profit. We believe the bourse is likely to continue to decline in next couple of days bringing back selected counters to attractive prices. Thus, we advise our investors accumulate on a decline market as we believe that at 5,200 level market valuations seem in line with peer markets,” Arrenga said.

Bukit Darah, Selinsing and Ceylon Beverage Holdings were the largest contributors to the decline of the index, which some linked to anomalies of ATS Version 7.

http://www.ft.lk/2012/02/28/foreign-net-inflow-tops-rs-3-billion/

chamith

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sriranga

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Foreigners are Active in CSE. But Local Investors/Traders are Inactive For-bu10

Rajaraam

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Thank you sriranga for detail imformation. As per your data from 1st Jan 2012 todate net foreign inflow exceeds Rs. 2.3 bn. Now locals (HNWI s) are also active. Hopefully market would be better in the coming weeks.

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Foreigners are Active in CSE. But Local Investors/Traders are Inactive

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