Sri Lanka fighting leaves investors jittery

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

Apr. 28 (AFP) – Sri Lanka’s bloodiest bombings in four years have made investors jittery and led to the first-ever downgrade in the island’s sovereign ratings, industry officials said Friday. Three British nationals were wounded in a mine attack aimed at a naval bus in the island’s northeast this month, prompting Britain to issue a stronger travel advisory. A suicide bombing against the army chief in Colombo and the military’s retaliatory air strikes saw the Colombo Stock Exchange plunge more than four percent this week.

“This is indeed a setback,” said Susantha Ratnayake, head of Sri Lanka’s diversified John Keells Holdings which has investments in hotels and ports. “But we are carrying on with our investment plans for the next two years.”

Sri Lanka’s economy has faced ups and downs during the seemingly unending violence over the past three decades, but the February 2002 truce between government troops and Tiger rebels caused a spurt of consistent growth.

Then this week’s bloodshed and fears that the ceasefire was about to collapse completely spooked investors.

In the two weeks leading to Tuesday’s attack on army chief Sarath Fonseka, bombings alone claimed at least 85 lives a

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