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)