SL capital markets showcased to intl. fund managers

Wednesday, 8 June 2011 01:33 -     - {{hitsCtrl.values.hits}}

Sri Lanka’s capital markets open for business: Securities and Exchange Commission (SEC) Director General Malik Cader, SEC Capital Market Development Director Vajira Wijegunawardene, LSE Global Development Director Tony Weerasinghe, Senior Minister of International Cooperation Dr. Sarath Amunugama and SEC Chairperson Indrani Sugathadasa applaud at the event in London organised by the London Stock Exchange – Pic by Nimal Navaratne

Sri Lanka continues to gain ground on the global platform as corporate heads and government officials met international fund managers at a forum organised by the London Stock Exchange (LSE).

Describing the event as an “excellent and rare opportunity” Securities and Exchange Commission (SEC) Director General Malik Cader told the Daily FT that there was “significant interest” from the international fund managers to do business with Sri Lanka. The event took place last week when the LSE invited stakeholders of Sri Lankan capital market to showcase its potential and opportunities to international fund managers based in London.

Top Lankan companies including John Keells Holdings, Hemas Holdings, DFCC Bank, Carson Cumberbatch, Dialog, MTD Walkers and Expolanka made presentations which were followed by one to one meetings with the fund managers that lasted well into the evening, a statement released by the SEC noted.   The event titled ‘Sri Lankan Capital Market Day’ was held on 3 June 2011 at the LSE with the ceremonial opening of the day’s trading under the patronage of Senior Minister of International Co-operation, Dr. Sarath Amunugama.

Subsequently, the Sri Lankan capital market was showcased to a group of over 25 reputed international fund managers.

The opening address was made by, LSE Global Development Director Tony Weerasinghe. Dr. Sarath Amunugama in his keynote address highlighted the importance of current business environment, the opportunities provided by the State and the potential of Sri Lanka being a regional financial hub.

An informative panel discussion was held with the SEC Chairperson Indrani Sugathadasa, Colombo Stock Exchange (CSE) Chairman Nihal Fonseka and the SEC Director General Malik Cader.

In addition, the Sri Lankan delegation was hosted to a round table luncheon discussion on 2 June 2011 by Bloomberg News which included a television interview with the Minister and the Chairperson of the SEC.

The Sri Lankan High Commission in the United Kingdom organised an event at the prestigious Carlton Club where the Minister and the delegation met the members of the British Chamber and the Sri Lankan Diaspora.

Heraymila Securities road show in Dubai kicks off today

Sri Lanka-based stockbroking firm Heraymila Securities Limited (HSL) along with its Dubai-based parent, Heraymila Investments Limited (HIL), will today kick off a road show in Dubai titled ‘Investment Destination Sri Lanka’.

The two-day event, led by Dr. Sarath Amunugama — Senior Minister for International Monetary Co-operation, Sri Lanka — under the patronage of Sarath Wijesinghe, Sri Lanka’s Ambassador to the UAE, will showcase Sri Lanka as an attractive investment destination.

Sri Lanka has rebounded successfully from decades of conflict to become a rising star in the Asian economy: GDP growth reached eight per cent in 2010 from 3.5 per cent in 2009 and is estimated to remain buoyant in the next few years.

The ending of the civil war and the gradual recovery of the global recession have had a positive impact on leading economic indicators in Sri Lanka. Inflation remains low at single digit levels; market interest rates continue to remain low in line with reduction in policy rates facilitating private sector investments; the fiscal situation has improved supported by the expansion of economic activity, the addressing of certain persistent structural issues in the tax system, as well as the containment of recurrent expenditure; and the external reserves of the country further improved to record its highest level in 2010.

The Government of Sri Lanka has shown firm commitment towards developing the infrastructure necessary for accelerated investments into many sectors of the economy. A primary goal is to develop Sri Lanka as a maritime, aviation, energy, knowledge and commercial hub in the region.

The Government of Sri Lanka’s economic targets for the next six years include doubling the per capita income by 2016; increasing private investments from both foreign and domestic sources from the present level of 19-21 per cent of GDP to a range of 26 to 28 per cent over the next six years; and increasing total investment (private and public sector) from around 25-27 per cent to 32-35 per cent of GDP to support the targeted economic growth in excess of eight per cent in the medium term and 10 per cent thereafter.

Near-term growth in post-war Sri Lanka is expected to be driven by the lagged influence of reduced interest rates, resilient consumption, recovering tourism, exports and post-war rehabilitation of the northern and eastern regions. This includes investment in infrastructure, buildings and businesses.

The long-term benefit to Sri Lanka will be from sustained growth in household income and spending. Peace and an improved economic infrastructure will also support exports and services.

The growth opportunities in Sri Lanka are well-reflected by its post-war stock market performance: Sri Lanka was the world’s top performing stock market in 2010 with an increase of 96% and as at 16 May 2011, is the world’s third best performing market with a gain of 10.89 per cent.

The impressive growth in the Colombo stock market is attributed to renewed investor confidence in the post-war economy that is supported by political stability. The end of the war has led to better risk ratings (S&P with B – a positive outlook; Fitch with B+ - a stable outlook), which is expected to lower the risk premium encouraging investment.

The road show to facilitate investments in Sri Lanka will commence today and provide the UAE investment community an opportunity to get a view on the exciting prospects in the emerging Sri Lankan economy.

Present at the road show would be Sri Lanka’s second largest bank, People’s Bank along with Sampath Bank, which won the ‘Bank of the Year – 2010’ awarded by the UK’s ‘The Banker’ magazine and Nations Trust Bank.

Also present would be top blue chip corporates John Keells Group, which has diverse interests ranging from infrastructure and leisure to financial services, Hemas Group with significant interests in FMCG and healthcare sectors and Expolanka Group, a Sri Lankan corporate with significant interests in Dubai and the Middle East.

HSL has also invited Sri Lankan representatives of two global financial powerhouses – Deutsche Bank, which specialises in providing trustee services to foreign investors in Sri Lanka and LR Global, the Sri Lankan arm of LR Global Partners, LP, a US-based private equity firm specialising in frontier markets.

HIL, having identified the post-war growth prospects for Sri Lanka very early on, invested in building a fully-fledged financial services company in Sri Lanka. Heraymila hopes to make a transformational change to the capital markets in Sri Lanka by introducing an array of innovative wealth management, investment banking and capital markets products similar to those in developed markets.

HSL, the stock-broking arm of the group, is striving to differentiate itself from its competitors by focusing on providing its clients with best-in-class research. HSL believes in impact investment, where investment benefits accrue to the community as well as to the investor.

Furthermore, Heraymila Group hopes to launch its first Sri Lankan unit trust fund through its fund management company, Heraymila Capital (Private) Limited. The fund will be marketed to both local and overseas clients and would provide investors an opportunity to take part in the Sri Lanka growth story.