Not surprisingly ‘real estate’ figured quite prominently in options suggested by readers of The Sunday Times FT as the safest and most lucrative investment today.

“Why not real estate,” asked one respondent, replying to the paper’s Financial Times section which ran the email poll asking readers what was the best investment. Readers were asked to name the best and most safest investment option among commercial banks, Central Bank (bonds/treasury bills),

tockmarkets, fund managers, finance companies and non-registered finance companies. (See graph)
While at the top end respondents clearly voted for treasury bills/bonds issued by the Central Bank as the safest investment with 86% of the poll against 83% that opted for commercial banks, at the bottom end, the negative vote went to non-registered finance companies (like Sakvithi) with 90 % saying that was the most, unsafe investment. The other investment options didn’t figure too well with stockmarkets mustering just 16% support while fund managers and finance companies did slightly better at 18 % support, each.

The Sunday Times FT survey on best investment options

With the debate rising over the best investment option in Sri Lanka to the people, the public and private sectors after the controversial collapse of Sakvithi, an unregistered finance company, and coming on the heels of the dramatic collapse of Pramuka Bank, The Sunday Times FT decided to conduct an email poll on what is the best option for investment.

A choice was given between Commercial Banks, Central Bank (bonds/treasury bills), Stockmarkets, Fund managers, Finance Companies and Non-registered finance companies, and respondents asked to name the best options. While our story on Page 1 gives the results of the poll, here are some additional comments sent by readers.

Views:

- None of them represents a safe investment option. On the other hand precious metals (not jewellery), US dollars and euros converted in the blackmarket are the safest bets.
- There is a strong case for investment in Treasury bills and bonds as no government in the past has let down the masses in not honouring these payments.
- There was something missing in this survey – Real Estate. I believe real estate is the best and safest option for investment.
- Commercial banks are my preference depending on the bank. Fund Managers will depend on the management team. However in all investments, the higher the risk -- higher the return.
- Commercial banks are the safest investment and of this I would say the state banks are the safest. NSB would top the list by far followed by the Bank of Ceylon. I would look at the private banks in to two sub categories - well established large ones like Commercial Bank, HNB, Sampath, NDB Bank and Seylan. Of these, Commercial would top the list. Then there are the smaller, relatively new private banks and these don’t yet inspire that much confidence. The last on the list are the foreign banks. These would be the ones to be careful of most as we have no idea what is happening to their parent banks overseas.
- The old order has changed, nothing can be considered safe anymore after the collapse of major banks and financial institutions in the US. Even some countries have gone bankrupt. For an individual investor; it’s the oldest saying “don’t put all your eggs in one basket”, spread the wealth on property, vehicles, stocks and deposits (when depositing see who the senior directors are; what has been their long term track record, and the reputation of the company and if it belongs to a group, the strength of that group). Property is by far the safest long term investment, followed by popular brands of Japanese vehicles (in Sri Lanka).
-- Just because an organisation is regulated by the Central Bank doesn’t mean the depositors are safe. Pramuka Bank is a classic example.
-- Treasury bills and government bonds are the most secure and returns are better than what commercial banks pay. Last month’s TB rate of 19% net of tax is equal to 21% paid by a bank which does not provide the same level of security.
-- One nagging question: Had Sakvithi been registered with the Central Bank and still fleeced the investors what would the Central Bank have done? Pramuka Bank founder director Rohan Perera is still absconding and so is Sakvithi Ranasinghe.
-- More and more Sri Lankans are investing in real estate and consider it as the safest investment option.
-- Many people don’t understand treasury bills – particularly the man on the street who gets caught to scams like Sakvithi.