Israel Paulraj, Chairman of the Ceylon Guardian Investment Trust PLC says ” the long term development potential of Sri Lanka will flow through its equity markets, which is likely to grow in stature”.
According to Paulraj, this is possible since the current market capitalization to GDP is still a mere 33% when compared with more mature markets where it can exceed 100%”.
However, the Fund Manager, commenting on his firm’s 2011/2012 annual report says, if this is to happen, the country’s fundamentals need to be in place, thus helping the local equity market.
He suggests that Sri Lanka should list some of the state owned enterprises in the capital markets which will help better reflect the country’s economic profile in the bourse.
Paulraj reveals the local equity market has struggled to raise foreign investments, as those investors are at present not interested in frontier markets such as Sri Lanka, owing to both external and internal factors.
He says, the firms “The Sri Lanka Fund” too has been struggling to raise investments owing to this situation.
Ceylon Guardian Investment Trust PLC has recorded a net profit of Rs. 2.1 billion during the year 2011/2012.
“Our performance is attributed to booking profits on selected overvalued stocks when the market was at high level, thus securing substantial capital gains” added Paulraj.
The firm’s portfolio value has declined to Rs. 28 billion down from Rs. 36 billion remained a year earlier.