Sri Lanka equities could be buffeted by Japan fallout: brokerage

Mar 17, 2011 (LBO) - Sri Lanka's economy may not be much affected by the devastation in Japan in the short term but a global fallout may impact commodity prices and capital flows, analysts and officials said. "The direct impact of the Japanese natural disaster on the Sri Lanka economy should be small," Heraymila Securities said in a note to clients.

"Only about 2 percent of exports are to Japan and around 2 percent of tourists are from Japan. However, Japan is a generous donor, accounting for around thirds of total donations."

Central Bank deputy governor Dharma Dheerasinghe told Bloomberg newswires that there are unlikely to be short term disruptions to committed aid disbursements.

"We are also a big beneficiary of Japanese aid, but this does not take place on a daily basis," Dheerasinghe was quoted as saying.

"I don’t see a threat to this as the Japanese government is functioning."

Heraymila said there could also be more demand for non-nuclear power including thermal and renewable energy following problems at Japanese nuclear plants.

The Japanese Yen has also hit fresh highs, peaking to a post Second World War high this week amid liquidity preference (private sector ster