Sri Lanka’s market is tipped to be growing at a very fast pace and projected to become in 10 years where it needed to head to 30 years ago, an international investment banker said.
“Your market is growing very fast,” and it can grow within 10 years which it could not head towards in 30 years,” CIMB Group CEO Dato’ Sri Nazir Razak said at a media briefing in Colombo last week. He was speaking at the event held to announce the company’s foray into the Sri Lankan market through the establishment of a joint venture for an Investment Banking Advisory service together with two Sri Lankans individuals in Colombo.
While this service is not regulated by the Central Bank in Sri Lanka, Mr. Razak observed that they however, continue to be regulated by the Malaysian Central Bank.
But Sri Lanka will initially remain unregulated in terms of any instruments in place to regulate financial advisory services in the country.
He noted that timing is important in entering a market adding that they would be able to seek out opportunities and attract potential investors in ASEAN region for Sri Lanka.
Malaysia’s second largest financial service provider and one of ASEAN’s leading universal banking groups offering consumer banking, investment banking, Islamic banking, asset management and insurance products and services entered Sri Lanka through a joint venture with investment bankers Ms. Reshani Dangalla and Union Bank Deputy Chairman Alex Lovell.
CIMB Group will hold 51% of the joint venture share capital through its wholly owned subsidiary CIMB Securities International Pte Ld., with the remaining 49% held by the two shareholders with a commitment of upto US$2 million.
Mr. Razak pointed out that ASEAN is capable of assisting Sri Lanka’s development drive as this region’s economic community is 600 million people and which is the key driver alongside China and India. With Sri Lanka seeking to build its debt, capital and bond market they will be in a position to help out, he said.
CIMB will be encouraging its clients to now seek out opportunities in Colombo in view of the growing level of industrial and financial activity and since there is an economic growth potential, Mr. Razak said.
Mr. Lovell speaking on the occasion said it was an opportune time to enter into this new venture adding that they are currently in the process of looking at various opportunities. Ms. Dangalla said that Sri Lanka has emerged and the international community is making its commitment now in the country which is “admirable” noting that this new venture is an endorsement of Colombo’s potential.
The new entity will leverage the expertise and extensive local and regional network of the partners to provide investment banking advisory service to a fast growing domestic investment and capital market. The service will include broad corporate finance advisory capabilities as well as structuring of equities and fixed income securities.