Every Asian and Emerging Market Investment fund of any size needs to obtain some knowledge of this market.
Key facts on the Sri Lanka stock market are:
• There is rapid eps growth. The last quarterly earnings figures for the market were up 202%. The 22 largest
companies showed eps growth of 71% for the first nine months of 2010.
• The Asia Securities earnings growth forecasts do not yet reflect the proposed reduction in Corporation Tax, which will boost both quoted company eps and economic activity generally.
• Last year’s stock market growth was achieved without ‘hot money’ inflows from abroad. Overall, there was a net outflow of foreign money during the year, particularly during the first nine months.
• The market p/e ratio is higher than many comparatives. This is, however, based on historic earnings.
• Nationally, GDP growth in 2010 is expected to be 8%, the fastest rate of growth since 2002. The growth is coming from all three main sectors of the economy, i.e. the service industry (including tourism), manufacturing and agriculture.
• The national Budget deficit, while significant, is narrowing. Rising inflation, driven by food and oil imports,
is more of a concern, but the Central Bank believes inflation will remain in single digits in the coming year.
• The national economy is becoming more open. The import duty on vehicles was halved last year, and
customs duties for raw materials and capital equipment reduced.
• There are as yet no ETFs for the Sri Lanka market.
Visit for the full report - http://www.stockopedia.co.uk/research/sri-lanka-was-worlds-top-performing-stock-market-in-2010-52403/
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