Thursday, October 28, 2010

Bull run to end, CSE growth to slowdown

Principal Partner of New York based portfolio fund management company LR Global, Don LaGuardia said Sri Lanka’s capital market has made exceptional gains since the end of the conflict almost one and a half years ago.

"You have made tremendous progress in just one and a half years and I think you cannot expect anything more than what you have achieved," he said addressing a CEO breakfast forum organised by the Institute of Chartered Accountants of Sri Lanka yesterday.

"This means the public sector and private sector are on the right path," LaGuardia said.

But, he said there was a long way to go before the capital market reached a sustained high level of development. There are concerns that the CSE was overheating. "I do not think the market is overheated, it is probably fairly valued. I do not think the high growth experienced by the market would continue for long, if at all, growth would be much slower," LaGuardia said.

He said LR Global was cautious in investing in the stock exchange. "There are probably a few good stocks that are undervalued, but overall, we would be cautious in investing in the stock exchange," he said.

LaGuardia said LR Global was keen on investing in pre-IPO companies in the energy, construction and leisure sectors, helping them lay the ground work to go public. "We are here for the long term," he said.

Deepening liquidity, enforcing regulation consistently and fair valuations were crucial to driving sustained growth in the stock market, LaGuardia pointed out.

LR Global has an office in Sri Lanka and plans to infuse US$ 20 million in its activities here. The company specialises in entering frontier markets, small, not easily accessible economies.

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