Bansei bullish on Sri Lanka

Monday, 3 February 2014 01:41 - - {{hitsCtrl.values.hits}}

Japanese securities firm has lured staggering Rs. 25 b investment into Sri Lanka Govt. bonds in a year
Expresses confidence on continued inflows as more Japanese wealth customers look for higher but safer returns
With 15% stake in Pan Asia Bank and exclusive partnership with NWS Holdings Bansei keen on expanding further in the financial services sector

Japan’s Bansei Securities Group has turned very bullish on post-war Sri Lanka with the firm having lured a staggering Rs. 25 billion investment from the land of rising sun into Government bonds in just one year. Bansei Securities Group Chairman Toyohiko Murakami who was in Sri Lanka on a business trip last week told the Daily FT that around 4,000 of the company’s clients in Japan, mostly wealthy retired Japanese, have so far invested Rs. 25 billion in Sri Lankan Government securities. “Our clients find investment in Sri Lankan Government bonds as safe and attractive. This is because of the rebound in socioeconomic growth in post-war Sri Lanka as well as the relatively strong Lankan currency,” said Murakami in an interview along with Bansei Securities principal agents and business partner locally, NWS Holdings Ltd. Bansei is a trading member of the Tokyo Stock Exchange and has been investing in Lankan Government bonds for over a year after NWS

Holdings, of which major investor and Chairman is Japanese national Takashi Igarashi, promoted Sri Lanka as an emerging investment destination. In April last year, growing confidence by Bansei in Sri Lanka saw it taking up a 15% stake in Pan Asia Bank for Rs. 930 million in a deal structured by NWS Holdings. Both Murakami and Igarashi sit on the Pan Asia Bank Plc Board. Murakami said Bansei manages clients’ funds by investing around Japanese Yen 6 to 8 billion in other emerging global markets such as Brazil, Mexico and Turkey. He said that Brazil’s Government paper offers higher returns than Sri Lanka but its currency is relatively weaker than Sri Lanka. “Overall sound macroeconomic fundamentals make Sri Lanka a lot safer and attractive. Our clients are happy and so are we,” the Bansei Securities Chairman added. According to him, more retired and wealthy Japanese investors are looking at emerging markets including Sri Lanka as well as those in South Asia. “Given Sri Lanka’s strategic location in South Asia, the country is a good platform,” he added. Given the future upside, Bansei Securities, which set up an office at the World Trade Centre in Colombo recently, is exploring fresh opportunities in Sri Lanka’s financial services sector. This is apart from further promoting Japanese investments in Government securities. At present the Central Bank has imposed a cap of 12.5% for foreign investment into Government bonds. In a bid to promote Sri Lanka, recently Bansei Securities enlisted its Executive Advisor and former Nomura Securities senior official Takanori Shimizu to write a book on Sri Lanka, detailing its political stability, rich history and culture as well as opportunities in tourism and financial markets. The 10,000 copies of the Japanese book have been almost sold out, encouraging Bansei to order a re-print for 10,000 copies as well as launch an English version. Shimizu said there is a lot of goodwill in Japan on Sri Lanka but up-to-date information on Sri Lanka was lacking and the book has been very useful in promoting Sri Lanka among Bansei clients as well as other prospective investors. Soon after the investment in Pan Asia Bank was made, Murakami emphasised that Sri Lanka possessed the potential to become a hub in this region and the Bansei’s investment in Pan Asia Bank symbolised the commitment of the Japanese investment firm’s endeavour to share the economic prosperities of Sri Lanka and Asia Pacific region. NWS Holdings has been promoting Japanese investments into Sri Lanka via two Sri Lanka Investment Forums in Tokyo in 2012 and 2011. A fresh effort is underway to hold a much larger forum in October 2014 as well. NWS is primarily involved in the structuring of mergers and acquisitions, investments in listed and private equity and routing investments to corporate and Government debt. With a strong Japanese influence of its majority shareholding, the company prides itself on its disciplined approach to identifying, canvassing and negotiating with high net worth potential investors overseas and partnering them with the best possible business ventures in Sri Lanka.