Public and private infrastructure development activities kicking in the post-war development phase of Sri Lanka would also help raise SIRA’s future earnings and it is currently upgrading its capacity and facilities to cater to the surge in demand. SIRA also plans to diversify into hydro power and has expressed interest in moving into the leisure sector. We expect these measures to hold strong growth prospects for the group.
Global copper prices have risen about 50% over the last year, and analyst expects them to rise further in 2011 due to increased demand from China. However, SIRA is shifting to ABC which uses aluminium as the key raw material. Aluminium prices have not appreciated compared to copper, and to that extent SIRA is less exposed to a possible increase in copper prices.
Source: NDB Stock Brokers