Lanka will receive more fund managed assets than Malaysia

Global fund managers' interest in Sri Lanka is on the increase and Sri Lanka will receive more fund managed assets than Malaysia in the next two years, said Hong Kong based economist Dr. Jim Walker.

Dr. Walker spoke on Positioning Sri Lanka as a Frontier Market at a seminar in Colombo recently. He said that investors who are focused on Sri Lanka will come, but not automatically. Policies together with benefits of the peace dividends must be highlighted to them. Dr. Walker said that some of the best companies are in Sri Lanka which proves that the country is an attractive location for investment. He said that quality management and financial soundness will be rewarded by attracting quality investors. Most importantly, regulation by the Central Bank is necessary.

Frontier markets such as Vietnam are in chaos due to policies adopted. China and India are predicted to slow down in the next two years. This too will help Sri Lanka to attract more investments, he said.

Despite the record high bullishness towards equities the world economy is in worse shape today than it was two years ago.

We expect a US double dip in the next six months following the Christmas firm patch. Private sector deleveraging and local government problems will come to the fore.

In addition record corporate profits won't help with the signals from the Fed and the government saying "don't invest".

The European sovereign debt woes are not receding but mounting while emerging markets are being throttled by high commodity prices and accommodative monetary policies while the domestic demand too will falter. -SG