COLOMBO (EconomyNext) – The Colombo Stock Exchange has advised investors not to be deterred by market volatility and invest prudently, saying turnover so far this year has been better than 2014 and foreigners were continuing to invest.
“With the current low interest rates, the stock market is an alternate investment opportunity for those looking to invest their excess income,” the Sri Lankan bourse said in a statement.
Despite current market volatility in the stock market, daily average turnover in 2015 is proving to be better than 2014, it said.
“Investors could look at investing in the stock market prudently, and not be dissuaded by volatility; but should see current market conditions as an opportune environment to enter the market and grow their capital in the longer term.”
The CSE said potential and existing investors should take into consideration that present market volatility has not dissuaded foreign investors, but rather increased their contribution to overall market turnover and daily average turnover.
The net foreign inflow in 2015 shows a marked improvement from 2014, despite the positive performance of 2014, it said.
“Foreign investors have shown an avid interest in the market this year, with the significant political changes that have taken place,” the CSE said, referring to the change of government in January.
The CSE said prices of nearly 87 stocks had increased by over 5 percent of which nearly 28 stocks have shown a price appreciation of 25 percent this year.
“Despite market volatility in the first few months of this year, it is our belief that the volatility will settle and market confidence will improve in the coming months,” CSE Head of Market Development Niroshan Wijesundere said.
“Therefore there is significant growth potential in the stock market. Investors should take the initiative to undertake research by understanding the financial statements of companies and investing wisely by looking at fundamentals of companies and earning potential in order to maximize their profits.