SL to outperform other equity markets, attracting FDIs under investor bubble
Sri Lanka is gearing to outperform other frontier equity markets during 2021 since it is trading at attractive valuations with the creation of a conducive environment for investors to visit the island under an investor bubble scheme, State Minister of Finance Ajith Nivard Cabraal told the Business Times.
Foreign investors will be given an opportunity to study the potential and suitability of the country enabling them to make their investments, he said.
Many top global investors have already expressed their keenness to invest in the island and it is not easy to convince them to make their investment decisions under the present COVID-19 crisis.
Lot of efforts will have to be made to attract foreign direct investments to meet this year’s target of US$1.5 to $2.5 while making maximum efforts to achieve the economic growth of 6 percent of GDP, he added.
The new scheme of investor bubble will provide facilities for foreign investors to make whistle stop visits to Sri Lanka without waiting 14 days in a quarantine centre and it has brought fruitful results, Mr. Cabraal said.
Global financier, Nathaniel Rothschild of the famous Rothschild dynasty, was among the investors who visited the country under this scheme, he pointed out adding that he was highly impressed during his stay in the island. Top Silicon Valley Investor Insaaf Mohideen became the third influential investor to visit Sri Lanka within the past few weeks, following Wes Edens of New Fortress Energy and Mr. Rothschild.
They discussed investment opportunities pertaining to Information Technology, Real Estate, Business Turnaround and Capital Markets while in the country.
He noted that the government intends to hedge the foreign exchange risk of foreigners via swaps, to provide some incentive to them to buy rupee bonds, as foreigners have continued to flee the rupee bond market since 2015.
He added that various forms of capital as well as debt including equity capital, seed capital, and short and long term loan facilities need to be further developing the country’s businesses and industries.
A new fiscal policy tool is to be introduced soon to support capital markets with a view to attracting foreign funds into the country to resurrect COVID-19-hit businesses and industries which is now crucial for national development, he disclosed.