Sri Lanka’s stock market, the world’s second-best performer this year, may see a near threefold rise in share sales in the second half from the first six months amid rising investor demand, according to National Development Bank Plc.
“The recent h
igh oversubscriptions of new issues show the liquidity that is available,” Vajira Kulatilaka, head of investment banking at NDB Bank, the nation’s largest non- government corporate lender, said by telephone today. “Now that the war is over, there is a lot of hope and good sentiment.”The South Asian island’s Colombo All-Share Index has climbed 45 percent this year and is the best performer after Mongolia among benchmarks tracked by Bloomberg as the end of the island’s civil war spurred an economic recovery. Five Sri Lankan companies announced plans to raise $7.6 million in initial share sales in the first half. Colombo-based retailer Odel Ltd.
this month received demand for 63 times the 250.5 million rupees ($2.2 million) offered.
Kulatilaka said he’s working with companies in finance, power, engineering and agriculture industries that may seek listings worth about 2 billion rupees this year. NDB Investment Bank Ltd., the lender’s investment banking unit, is arranging the 630 million rupee initial share sale of Sri Lanka’s PC House Ltd., a computer distributor. The firm in 2005 arranged the country’s biggest IPO for Dialog Axiata Ltd., the biggest mobile-phone operator.
Sri Lanka is aiming to accelerate economic growth to 7 percent in 2010, the fastest pace in four years. Gross domestic product rose 7.1 percent in the three months ended March 31 from a year earlier, after gaining 6.2 percent in the previous quarter.
To contact the reporters on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net
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