Sri Lanka economy, stocks set for take-off: research report

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

April 23, 2009 (LBO) – Sri Lanka’s economy could take-off, and with it the island’s stock market, as a 25-year separatist draws to a close and the possibility of reconstruction opens up, an equities research report has said. “There is a high possibility of a turnaround in the Sri Lankan equity market due to many reasons,” the report by NDB Stockbrokers said.

Companies that could benefit include those in tourism, real estate, cement and cable manufacturers, agriculture-related companies and diversified firms, especially those in infrastructure like ports.

The end of the war could trigger a recovery in share prices of companies listed in the Colombo Stock Exchange which fell by about 40 percent in 2008.

Government forces have cornered remnants of Tamil Tiger rebels in a small strip of coast in the north-east and say the guerrillas can be crushed within days.

NDB Stockbrokers said the military’s gains had generated optimism that the war in the north-east was finally coming to an end.

“With far-sighted measures and a proper development framework in the next few months, Sri Lanka could once again attain the status of ‘one of the favourite emerging economies’ in the near future,” the report said.


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