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The Stocks Market in Sri Lanka has demonstrated mild growth recently, influenced by factors such as political stability, foreign investment interest, and evolving investor sentiment, alongside challenges like economic fluctuations and regulatory changes that impact market confidence.
Customer preferences: Investors in Sri Lanka are increasingly gravitating towards sustainable and socially responsible investment options, reflecting a growing awareness of environmental and social governance (ESG) factors. This trend is fueled by a younger demographic prioritizing ethical consumption and corporate accountability. Additionally, technological advancements are driving interest in fintech solutions, prompting a rise in online trading platforms. As the market evolves, investors are also showing a preference for companies that align with local cultural values and contribute positively to community development.
Trends in the market: In Sri Lanka, the stock market is experiencing a notable shift towards sustainable and socially responsible investments, driven by an increasing awareness of environmental and social governance (ESG) factors among investors. This trend is particularly prominent among younger investors who prioritize ethical consumption and corporate accountability. Furthermore, the rise of fintech solutions has led to an increase in online trading platforms, making stock trading more accessible. As these trends evolve, industry stakeholders must adapt to the growing demand for transparency and community-focused initiatives to remain competitive and meet investor expectations.
Local special circumstances: In Sri Lanka, the stock market is evolving under the influence of its unique cultural and regulatory landscape. The emphasis on community values and social harmony shapes investor behavior, with a growing preference for companies that engage in ethical practices and contribute to local development. Additionally, the recent regulatory reforms aimed at enhancing market transparency and protecting minority investors have bolstered confidence. Coupled with the island's strategic location as a trade hub, these factors create a distinctive investment environment that attracts both local and foreign investors seeking sustainable opportunities.
Underlying macroeconomic factors: The performance of the stock market in Sri Lanka is significantly influenced by overarching macroeconomic factors such as national economic growth, inflation rates, and foreign direct investment (FDI). A stable economic environment, characterized by consistent GDP growth and moderate inflation, fosters investor confidence and encourages market participation. Furthermore, government fiscal policies aimed at stimulating economic activity, such as tax incentives for investments and infrastructure development, enhance market attractiveness. Global economic trends, including commodity prices and international trade dynamics, also play a crucial role, impacting sectors like agriculture and tourism, which are vital for the country’s economic health and stock market performance.
Data coverage:
The data encompasses B2C enterprises. Figures are based on market capitalization/ market volume/ number of trades/ number of listed domestic companies data within the stock market.Modeling approach / Market size:
Market sizes are determined by a bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data from Company Insights, World Bank, the Federation of Exchanges as well as stock exchanges, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer price index (CPI), total investment (% of GDP), trade (% of GDP), household income, internet penetration, deposit interest rate, lending interest rate, central bank interest rate, unemployment rate, internet penetration and online banking penetration. This data helps us estimate the market size for each country individually.Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In the market, we use both the HOLT-damped Trend method and the ARIMA method to forecast future development. The main drivers are GDP per capita, consumer price index (CPI), and central bank interest rate. The scenario analysis is based on a Monte Carlo simulation approach generating a range of possible outcomes by creating random variations in forecasted data points, based on assumptions about potential fluctuations in future values. By running numerous simulated scenarios, the model provides an estimated distribution of results, allowing for an analysis of likely ranges and confidence intervals around the forecast.Additional notes:
The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.Mon - Fri, 9am - 6pm (EST)
Mon - Fri, 9am - 5pm (SGT)
Mon - Fri, 10:00am - 6:00pm (JST)
Mon - Fri, 9:30am - 5pm (GMT)
Mon - Fri, 9am - 6pm (EST)