JPMorgan backs Sri Lanka bonds on bets that crippling crisis to ease
LONDON (Reuters): US investment bank JPMorgan backed Sri Lanka’s crisis-hit Government bonds on Wednesday (18), saying recent political changes in the country should gradually improve its strains and help its talks with the International Monetary Fund.
Adding an ‘overweight’ – effectively a buy recommendation – JPMorgan analysts said: “political stability should pave the way for bonds to move higher from near all-time lows.”
Sri Lanka is officially now in default as a so-called “grace period” to make some already – overdue bond interest payments expired on 18 May.
“We think this stability should result in both IMF discussions and the process of appointing legal and financial advisors moving forward,” JPMorgan added.
The backing received by JPMorgan for Sri Lankan bonds is indicative of the growing confidence in Sri Lanka’s economic resilience and the action taken to get the country’s economy back on track to recover from the economic crisis that was brought about following the global pandemic. Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is once again on the path to recovery. The country’s geographical positioning in the Indian Ocean, the development programme and the many trade agreements as well as concessions enjoyed by the country have also helped Sri Lanka’s growth while the country is working to position the island as an emerging business destination in the South Asian region. Given the country’s growing business potential and the confidence shown by international financial institutions as well as the expanding opportunities, foreign businesses/investors could confidently explore the growing opportunities in Sri Lanka.
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