Sri Lanka's shares hit a record high this week to make the market the top performer in Asia after a meteoric 2009 when the index soared 125 percent. But the rise is not proving attractive to foreign investors. They have been net sellers of the market since an end was declared to the island's 25-year civil war last May.
Here are some questions and answers about why foreigners are leaving:
Foreign investment was a net 1.4 billion rupees ($12.3 million) between January 1 and the end of the island's 25-year civil war in May 2009. By the end of the year though, the investment had turned into net sales of 789 million rupees, the first outflow since 2001. The trend is continuing this year. Foreigners have been net sellers of 5.6 billion rupees ($49 million) worth of shares in 33 out of the 41 trading sessions so far in 2010.
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