Canadian giant BMO Financial Group expresses interest in investing in Sri Lanka

Friday, 18 March 2011 00:26 -     - {{hitsCtrl.values.hits}}

The Bank of Montreal, more widely known as the BMO Financial Group, recognising the promise that Sri Lanka now holds for foreign investors, sent its representatives to Sri Lanka earlier this week to meet several parties including the Central Bank of Sri Lanka and other private investors to scope out the possibilities of investment in the near future.

“We think there are plenty of opportunities here and Sri Lanka is playing an important role in the frontier markets as well. We see that the regulators here are opening channels of investment forthwith for individuals and organisations to invest abroad and vice versa,” said an Investment Advisor with BMO Nesbitt Burns, Naush Beg.  “The regulators are also offering corporate treatment for investors coming in so we thought it would be a good opportunity for us to come and see in ground reality what the engineering process behind it is.”

Canada’s oldest and fourth largest bank, the BMO Financial Group follows the Canadian banking system, one that is considered to be one of the best banking systems in the world, largely because the Canadian banking system was not affected in the way that the other financial systems in the world were during the financial crisis.

Although the BMO Financial Group has a major presence globally, they understand that as a lot of people in Sri Lanka are approximately closer to Australia, they are therefore more aware of the Australian banking system over the Canadian banking system.

“With all credit due, the Australian banking system has survived very well during the crisis and so has the Canadian system but there is also that the Canadian banking system is a tier above the Australian banking system according to ratings by external organisations. Surviving as well as we did during the crisis created an opportunity for us, for our financial systems to come and let people know what the Canadian banking system has to offer and also at the same time for us to understand what markets and opportunities we can tap into,” explained Beg.

Canada is also becoming more important on the global scene with their combination of well grounded fundamentals and readily available natural resources.  For example, they have the second largest oil reserves outside Saudi Arabia and 20% of the world’s supply of uranium; these factors give a hardcore stability factor to their currency.

Canadian companies are also very rich in cash, equity ratios are low and all facts and figures show that Canada has become very promising for the preservation of wealth for diversification purposes. As individuals’ and corporate wealth grows they cannot get enough of diversification and within the mature markets, Canada and Australia are the only two places that really come into play.

According to the IMF, from all the G7 countries, Canada will be the only country to return to surplus in 2015 and the Canadian dollar is slated to come to par and even move beyond the US dollar. Despite a backdrop of global macro weakness, Canada’s public debt capital has been plentiful and investor demand for equities has been very healthy.

“This visit has been a real eye-opener and we see a lot of opportunities to create synergies between ourselves and people that we met in Colombo, including the Central Bank, other financial institutions, asset managers and such and we see a lot of potential,” said another Investment Advisor with BMO Nesbitt Burns, Nadir Janmohamed.

“Toronto, where we come from, has a significant Sri Lankan population and they are not aware of the opportunities that exist here. So we are going to access that market, talk to those people and inform them of the opportunities that exist in their homeland. Our whole objective of running a business is to create a win-win situation,” he added.