Foreign investor interest increasing on Sri Lanka
Foreign investor interest is back in Sri Lanka and last week’s mega deal worth Rs. 22.7 billion on premier blue chip John Keells Holdings (JKH) is being flagged off as a big boost, the Daily FT has reported.
Consultant to the broker to the deal CT CLSA Securities Marianne Page has confirmed to the Daily FT that several foreign investors were keen on buying into JKH though the 10.7 percent stake was snapped up by Citigroup Global Markets Ltd., Agency Trading Prop Securities A/C.
The seller was Malaysia’s sovereign fund Khazanah Nasional Berhad.
“We didn’t do a global roadshow on JKH stake but the market got wind of it and there were several inquiries. Locally too there was interest. All those for were smaller parcels instead of the entirety,” the Singapore-based Page though declining to be specific has said.
Page has further noted that the price at which the deal happened (141.8 million shares at Rs. 160 each) was “fair” for both the seller and the buyer and the transaction took place midst tensions in the Middle East and its spillover effects to rest of the world.
“The fact that Citig-roup Global Markets Ltd., Agency Trading Prop Securities A/C picked up the big block in full reflects the confidence on JKH and in Sri Lanka. In that context the transaction is a big boost,” Page, who has been promoting equity investments into Sri Lanka for several decades, has said.
She has opined that the Colombo stock market had been oversold and valuations are attractive going forward.
“I believe foreign investor interest will gather momentum post General Elections. Post Presidential Poll, signs have been encouraging,” Page has added.
Market analysts linked the account to the Toronto, Ontario-based giant Fairfax. HWIC Asia Fund, linked to Fairfax already owned a 3 percent stake prior to last week’s mega acquisition and its latest stake is near 14 percent. The seller was Northern Trust Co S/A Broga Hill Investments Ltd., linked to Khazanah.
The deal has boosted investor sentiment and propelled the turnover at CSE to Rs. 23.6 billion, which is the highest since 2008.
The policies adopted by the government of Sri Lanka have given a boost to investor confidence in relation to Sri Lanka. The country’s business conducive environment and the continuous improvement in the ease of doing business environment in Sri Lanka have also helped boost investor confidence in the country. Also, Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region.
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