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performing bourses as investors reap the peace dividend from the end
to the island's bloody ethnic conflict. Investors are banking on
renewed economic strength and profits in the country that emerged in
May from a bloody and protracted civil war which claimed between 80
,000 and 100 ,000 lives over nearly four decades. "All the economic
indications are in the right direction but the end of the war has
been the key factor" in the market's performance, said Shivantha
Meepage, analyst at Acuity Stockbrokers in the capital Colombo.
Tourism-related stocks have been faring particularly well on the back
of expectations that more foreign holidaymakers will visit the
country's golden sandy beaches, picturesque tea- growing mountains and
ancient heritage sites. Infrastructure-related shares have also been
performing strongly on the back of plans by the government to rebuild
Sri Lanka's war-ravaged northeast. The positive news has helped make
the stock market Asia's best performer and just behind Peru's Lima
in the global stock market rankings. So far this year, the All Share
Price Index (ASPI) has recorded a 110 percent increase after sliding
41.57 percent last year, when government forces and Tamil
separatists were locked in what seemed an unwinnable war. "The ASPI
is one of the best performing indices in the world," said Tushara
Jayaratne, Business Development Manager of the Colombo Stock
Exchange. But with daily turnover a relatively paltry 10 million
dollars, it's still a dot on the global map for most investors. In
fact, nine billion dollars could buy all the 238 companies listed on
the bourse. "For all the good news, Sri Lanka is still a tiny speck
for a big-time foreign investor," said Channa Amaratunga, director at
CT Capital, an investment advisory company. The Central Bank of Sri
Lanka just raised its growth forecast for 2009 to 4.5 percent from
an earlier estimate of 2.5 percent, bolstering investor hopes of
stronger economic activity.
