Some Global money managers believe, Sri Lankan economy is growing and not as exposed to headwinds in the global economy, says an article published on Barrons.com
According to Barrons, some emerging market managers have noted that the country has a fair share of dividend-payers such as Banks, which are growing.
The report says banks may be a good way to play the growth.
David Ruff, a manager on the Forward International Dividend and Select Emerging Market Dividend funds has told Barrons that the Sri Lankan banks have a huge deposit base emanating from the tea sector, while the banks are also being boosted by hotels and infrastructure development in the country.
“Regulators are limiting loan growth so it doesn’t get out of hand. Much of the earnings growth is being passed on through dividends, with banks like Hatton National Bank paying a 5% dividend yield” the report said.
The report also says there are market risks such as decline in MSCI Sri Lanka index by 9% this year and also the resignation of the country’s SEC Chief complaining of corruption in the stock market.
However quoting money managers, Barrons say, there are opportunities created by the country’s development, especially of its tourism industry, which they believe is attractive over the long-term.
“While much of the developed world is in the midst of a major de-leveraging, Sri Lanka is just beginning a leveraging cycle as it rebuilds” adds the report.
Kristin Ceva, a money manager who handles $5.3 billion in emerging market bond assets for Payden & Rygel including the Emerging Market Bond fund too likes the Sri Lankan bonds.
Kristin has told Barrons, that the IMF oversight in Sri Lanka adds comfort over the country’s central bank policies.