Time to think and stimulate action considering the growth potential – Asia

Monday, 1 October 2012 00:00 - - {{hitsCtrl.values.hits}}

The bourse concluded the week slightly firmer with the ASI gaining a mere 62 points during the week. However, the week’s activities were energised to post commendable turnover and volume levels on the back of active participation of local and foreign investors.

This was evident from the net foreign inflow during the week which topped Rs. 1,418 million. Dialog Axiata, Asiri Hospital Holdings, and John Keells Holdings were the hot picks by the foreigners during the week. Their strategic equity investments is a sign that they not only perceive the equity market to have lot more potential but also they see the country’s economy to be more prosperous in the mid to long term with the business entities also likely to benefit from this.

A recent example can be quoted from the ownership change in AVIVA NDB Insurance, where American International Assurance Company Ltd is set to become the new owner. The post war growth has been drawing foreign investors to the country in various forms, yet we believe that this is just the beginning of the development process. Therefore, we believe that the foreign investors are seeing a lot of growth potential in the medium to long term, which is driving them to be a part of the investor community in Sri Lanka. In addition, the Standard Charted Bank revealed that the country’s economic growth for 2013E is poised to be 7.5%, driven by the recent policy adjustments that seem to be gaining traction, coupled with the domestic activities which are likely to compensate the expected lower export growth in 2013E.

It’s evident that the foreign investors are keen in taking positions in fundamentally sturdy counters and the companies which have medium to long term growth potential. So, this is the time to think about where the local investors are standing; are we confident enough of the equity market and the country’s medium to long term economic growth potential as much as the foreign investors are? Or are we staying back and not grabbing the best opportunities to reap the maximum benefits which are yet to flow? (Source: Asia Wealth Management).