Sri Lanka looks beyond euphoria
Stock markets are always a useful barometer of a national mood. The Colombo Stock Exchange is no exception: its All Share Price Index has doubled so far in 2009. On top of that, it’s also attracting IPOs.
The first post-war IPO was Hemas Power in September, which raised almost Rp2 billion ($17.4 million) and was 3.7 times oversubscribed; another, Seylan Bank, was in the markets at the time of writing. More will follow. "We have some in our deal pipeline," says Darshan Perera, chief operating officer of NDB Investment Bank, which led the Hemas Power deal. "The market is booming." He says P/E ratios are now around 13.
There is certainly room for more activity. "Only 200 companies are listed on the Colombo Stock Exchange out of 30,000 registered companies in the country," says Krishnan Balendra at John Keells Holdings. "We think many more will list as valuations are becoming more attractive."
