NDB Securities expects private sector to fill supply shortage in healthcare sector

NDB Securities Ltd. (NDBS), a top brokerage firm in Sri Lanka, released an industry report on the healthcare sector recently. 

The report combines publicly available data and expert opinions of industry stakeholders to construct an in-depth view on a highly competitive sector of the country that is currently being dominated by the Government sector. However, the report discusses in depth the fiscal challenges that will put pressure on the Government’s ability to continuously support the sector without the active participation of private sector players. Hence, the report provides an ideal platform for an investor interested in the healthcare space to understand the opportunities that are out there and take an informed investment decision on a key sector of the economy. 

Commenting on the publication, NDBS CEO Prasansini Mendis stated: “2017 is expected to be a challenging year for the industry. In my opinion, this is a year in which only the fittest and the most resilient will survive. We at NDBS are ready to face that challenge. The experienced advisory arm, award-winning research team, state-of-the art IT and back office system and the excellent compliance and risk management framework that we possess are expected to be the pillars on which we will give a truly tailor-made investment solution to our investors that goes beyond mere investment advising. We are passionate about what we do. Survival is not the goal; we intend to make a difference through best in the industry practices, expert knowledge on the industry and a time efficient service model.”

NDBS Head of Research Sidath Kalyanaratne, commenting on the sector, said: “We won the best stockbroking research team award last year at the capital markets awards 2016 organised by CFA Sri Lanka. Since then, we have worked even harder to develop and improve NDBS’s research pillar further with a very clear focus of providing quality research and analysis to the investment community of this country. As a result, we have added yet another report to our vast gamut of publications, this time on the healthcare sector. The sector is covered in depth to reflect the current industry dynamics, future industry opportunities and new trends that will set the pace in the industry over the short to medium term.”

Raguram Raamakrishnan, the sector analyst, added: “Sri Lanka healthcare indicators are well ahead of its regional peers as well as lower middle income peers. Further, certain indicators of the country, such as child mortality, maternal mortality and tuberculosis prevalence rate are on par with upper middle income countries. The commitment by the Government of Sri Lanka (GoSL) to continuously allocate a higher portion of its budget towards healthcare and education have led to this achievement. During 2000-2015, GoSL’s total spending recorded a 15-year Compound Annual Growth Rate (CAGR) of 13.7% whereas spending on education and healthcare grew at a 15-year CAGR of 14.1% and 15.4% respectively. In 2015, education (9.8%) and health (7.8%) combined accounted for 17.6% of total government expenditure. 

“The report identifies a rise in Non-Communicable Diseases (NCDs), ageing population and increasing per capita income as the main three demand drivers coupled with improvement in insurance penetration ratio to drive the healthcare industry going forward. Medical tourism, another potential driver for demand, is gaining popularity in Sri Lanka as the country possesses three Joint Commission International (JCI) accredited private hospitals that act as a catalyst to cater to this niche market. The country’s growing popularity as a tourist destination, improved connectivity and infrastructure would further strengthen its effort to be a substantial player in the medical tourism arena as well.”

The report estimates Sri Lanka’s private current healthcare expenditure (which is 48.0% of total healthcare expenditure and 53.3% of total current expenditure as of 2014) to be in the range of Rs. 232.8 billion by 2020, recording a six-year (2014-2020) estimated CAGR of 7.1%. 

NDB Securities is a fully-owned subsidiary of NDB Capital Holdings, the capital market arm of the NDB group. NDBS provides a platform to its institutional and retail clients to access the capital market in Sri Lanka through its equity and debt trading platform. This is supported by a number of value added services such as state-of-the-art online trading facilities for speedy trade execution, margin trading and other credit facilities through its parent NDB Bank and comprehensive coverage of research to add value to support trading activities.