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Foreigners still net sellers of Sri Lanka stocks

Sri Lanka’s main stock index rose 3% on Thursday – as foreigner investors sold a net $2 million worth. See Reuters’ report here.

Sri Lanka’s stock market has soared since the end of the island’s war, driven by proxy government buying through state-owned funds.

At the same time, there has been a net foreign outflow.

Whilst foreigners buy tactically, especially when stocks fall, they sell when the market rises.

Thus far in 2011, foreigners have net sold over $9 million – having sold a record $240 million in 2010.

Despite the war ending that year, 2009 ended with a net foreign outflow of $103 million.

Before then, from 2001, foreigners had been net buyers of Sri Lankan stocks. (See Reuters' report here.)

See our earlier posts:

Sri Lanka’s stocks: a closer look (Jan 2011)

Foreigners sell, state buys (Oct 2010)

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