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Monday, March 19, 2012

Govt bullish on US$ 500 m foreign equity target for capital market - CB Governor

* Khazanah deal has triggered positive foreign fund manager sentiment

By Ravi Ladduwahetty

The Government is extremely bullish in its target of UD$ 500 million in foreign investment flows into the Colombo Stock Market, which it expects to be a reality before end 2012.

The Central Bank announced in its road map that it has targeted US$ 500 million in terms of inflows from Foreign Fund Managers into the Colombo Stock Exchange and out of which there has been around US$ 140 million through the just concluded Khazanah Fund of Malaysia deal with John Keells Holdings PLC which yielded around US$ 120 million as well as others who accounted for another US$ 20 million, Central Bank Governor Ajith Nivard Cabraal told The Island Financial Review yesterday He also said that there was lots of foreign interest in the equity market which also meant that there was lots of scope for the development of the market with top blue chip corporate reporting excellent earnings and growth prospects which has been triggered from last Friday’s deal which was also the second largest ever transaction which crossed the floor of the Colombo Stock Exchange as well.

There has been a lot of inflows into various market portfolios and foreign fund managers are seeing value in the market with excellent growth prospects,

Meanwhile, John Keells Stockbrokers CEO Thivanka Ratnayaka said that the interest shown by the foreign fund managers following the Khazanah acquisition of John Keells Holdings PLC was an ongoing process of value based positions which was very encouraging.

The interest is on right now despite their were no specific transactions on at the moment, he said, adding that JKSB were putting the finishing touches to the Kazanah deal.

Top market sources also said that the government should also get Singapore’s Temasek, the Singaporean government ‘s investment arm to invest in the Colombo Stock Exchange in the wake of the success in the Khazanah deal and also the Templeton Fund of Mark Mobius and the world’s biggest equity investment portfolio – Berkshire Hathaway of business magnate Warren Buffet here as the returns that he reaped was less than 20% since the crash of the US economy in 2008.

Of the other foreign fund managers – JP Morgan, has also opened a Colombo office and has recently bought into Expo Lanka as well. There is also the Aberdeen Fund and the CF Ruffer Fund of the UK which are already in Sri Lanka, the latter which has been acquired by CT Capital.

source - www.island.lk