Looks like past roadshows and investment promotion efforts by the Sri Lankan stock market authorities and the broking industry at large have paid off. Many bankers and foreign fund managers have met up with top corporates during the past 10 months in a bid to channel funds into many firms, according to those who met [...]

The Sunday Times Sri Lanka

CSE roadshows live up to their name, CSE says

Big funds in talks with top corporates
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Looks like past roadshows and investment promotion efforts by the Sri Lankan stock market authorities and the broking industry at large have paid off.

Many bankers and foreign fund managers have met up with top corporates during the past 10 months in a bid to channel funds into many firms, according to those who met officials of these organisations.

After the New York investment forum in September which saw over 200 participants, including 150 major US institutional investors has been a success, according to Colombo Stock Exchange (CSE) officials. They say that numbers speak for themselves. “From September to October we saw a marked increase in foreign purchases from the US. It has increased by nearly double, from Rs. 49 billion to Rs. 97 billion (a Rs 47 billion increase). This was post-New York,” Niroshan Wijewardena, Head of Marketing CSE told the Business Times, correlating this increase to the positive connections the local participants had made in New York two months ago.

Industry analysts agree, saying that inquiries have increased.

“There has definitely been a change in perception amongst foreign investors. Post-New York there has been many inquiries,” a stockbroker said. He added that improving market sentiment is attracting stocks in the construction, energy, property and manufacturing sectors.

Foreign funds and managers including Europe- based ones operating out of Hong Kong and Singapore have also come to Sri Lanka and they were exploring partnerships, strategic stakes and extend funding lines to local firms, he said.

Nivard Cabraal, Governor Central Bank who was in New York for the forum, told the Business Times that many fund managers have visited Sri Lanka and met with potential partners to invest. “We see lower inflation rates and we have been seeing the growth at the right levels. This is an attractive market for foreigners,” he added.

“Invest Sri Lanka” Investor Forum which was held in Hong Kong recently showcasing the economic growth prospects and investment opportunities in Sri Lanka’s capital market has also lured some foreign entities,” Mr. Wijewardena noted, adding foreign purchases from Hong Kong was at Rs. 26.5 million from September to October this year. “From January to October this year we saw an inflow of Rs 39.4 million against Rs 4.4 million last year.”

Foreign buying, from India, against last year’s foreign inflow of Rs. 67.3 million upto October this year, was at Rs. 388 million, Mr. Wijewardena said, adding that out of this new investment was Rs. 289.3 million. “Investment from India has increased nearly six times,” he said. Singapore foreign buying was Rs. 9.26 billion since January, while last year it was Rs. 4 billion, according to CSE statistics.

Numbers look handsome and analysts say they will improve with added liquidity in the market.

Next up will be a roadshow in Australia – probably early next year, Mr. Wijewardena said, adding this will be targeted at the Sri Lankan Diaspora.

Analysts expect the All Share Index to rise by at least 15 per cent this year, scaling earnings.

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