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Morgan Stanley Investment Management Head of Emerging Markets Ruchir Sharma yesterday told a packed Sri Lanka Investor Forum in New York that the country’s positives outweighed the negatives and predicted Sri Lanka has the potential to shine brighter.
Making a presentation on the perspective of investing in Sri Lanka, Sharma listed several positives as well as negatives for the benefit of around 190 fund managers present at the JW Marriott Essex House Hotel in New York.
“There are many positives for Sri Lanka. Sri Lanka remains attractive and competitive and when it comes to equities Sri Lanka is cheap. Sri Lanka is in Morgan Stanley’s frontier market strategies and has some investments. Post-war Sri Lanka has a great opportunity to shine,” said Sharma, who is famous for his best seller ‘Breakout Nations’. “Sri Lanka has been among the good performing markets in the past decade,” he added.
He said that high investment, low inflation, satisfactory management of public debt and soundness of the banking system were some of the other positives.
“Sri Lanka is in a geographical sweet spot and has managed relations with India and China very well,” said Sharma, who recalled that during a 2011 meeting, President Mahinda Rajapaksa had told him: “China is my friend and India is my relative.”
Pix by Nisthar Cassim
The Morgan Stanley official, who shared with New York Forum that he fell in love with Sri Lanka during his 2011 visit, also shared some concerns and recommendations.
“Complacency is the biggest risk for Sri Lanka and I hope Sri Lanka can overcome this challenge,” Sharma told the Invest Sri Lanka Forum in New York, which was inaugurated by Senior Minister for International Monetary Cooperation and Deputy Finance Minister Dr. Sarath Amunugama.
Other officials present were Deputy Investment Promotion Minister Faiszer Musthapha, Central Bank Governor Nivard Cabraal, Permanent Representative of Sri Lanka to the United Nations in New York Dr. Palitha Kohona and Deputy Permanent Representative to the UN Major General Shavendra Silva.
Sharma, who has visited Sri Lanka in 1997 and 2011, thereby having a good perspective of the country during the conflict and in the post-war period, noted that very few can sustain economic success over a long time whilst others could remain emerging forever.
He noted that politics has been driving markets and this has been unprecedented in recent decades. He said that emerging economies do well during the first few terms of political leadership and in this regard President Rajapaksa has done a solid job in turning Sri Lanka around.
However, Sharma cautioned than political leadership enjoying longer tenure is a concern and some countries begin to see diminishing returns and a slowing pace of reforms. “This is a concern and not always true but it can happen,” he said.
He also said Sri Lanka needs to implement further improvements on the fiscal side and explore privatisation and rapid reduction in public debt given recent progress. “Less Government intervention in the economy is also recommended,” the Morgan Stanley official said.
Michael O’Hanlon, Senior Advisor at TPG Capital – which recently announced one of the biggest portfolio investments amounting to over $ 116 million in Sri Lanka via Union Bank Plc – also spoke at the Forum, sharing his firm’s experience in investing. TPG has $ 66 billion in funds under management.
Senior Minister Dr. Amunugama, Governor Nivard Cabraal and Ambassador Kohona highlighted the post-war rebound and opportunities in Sri Lanka, while CSE Chairman Vajira Kulatilleka also spoke.
The presentations were followed by a panel discussion with Dr. Amunugama, Cabraal, SEC Chairman Dr. Nalaka Godahewa and Kulatilleka.
The Investor Forum is the first-ever in North America and was organised by the Colombo Stock Exchange (CSE) and the Securities and Exchange Commission of Sri Lanka (SEC), in association with the Sri Lankan Embassy in Washington DC, Bloomberg and the American Chamber of Commerce (AMCHAM) Sri Lanka.
A record 190 fund managers attended the event whilst Sri Lanka had the largest contingent of listed firms, numbering 14 and around 28 representatives, as well as several broking firms.
The CSE said the registered major US institutional investors manage assets over $ 100 million. A series of one-to-one meetings were held between these participants and Lankan companies last afternoon, whilst a few more will be held today (5) as well.
The highest number of Sri Lankan listed companies, in comparison to previous forums participated at the New York event. The listed companies are John Keells Holdings PLC, Commercial Bank of Ceylon PLC, Hatton National Bank PLC, National Development Bank PLC, DFCC Bank, Hayleys PLC, Access Engineering PLC, People’s Leasing & Finance PLC, Hemas Holdings PLC, Softlogic Holdings PLC, Tokyo Cement Company (Lanka) PLC, LAUGFS Holdings PLC, Sunshine Holdings PLC and MTD Walkers PLC.
This was the third ‘Invest Sri Lanka – Investor Forum’ for the year, with previous Forums being held in Singapore and London in January and May respectively.
SEC and CSE officials visit NYSE
The Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) attended the market opening ceremony at the New York Stock Exchange (NYSE) on 3 September and met with NYSE Group President Tom Farley and NYSE Head of Corporate Affairs John R. Tuttle.
Special tokens of appreciation and cooperation were exchanged between the CSE and the NYSE.
The visit to the NYSE was a prelude to the ‘Invest Sri Lanka-Investor Forum,’ New York to be held on the following day (4).
The attendees at this event were SEC Chairman Dr. Nalaka Godahewa, CSE Chairman Vajira Kulatilleka, SEC Commission Member Mohamed Zuraish Hifaz Hashim, CSE CEO Rajeeva Bandaranaike, CSE Head of Market Development Niroshan Wijesundere, SEC Director External Relations Vajira Wijegunewardene, Lasitha Wijayagunawardane (CSE) and Dianne Silva (CSE).
