Japanese investment trickles in Sri Lankan stocks, other projects
More and more Japanese are eyeing stocks in Sri Lankan business and setting up fresh businesses, industry analysts said
“A Japanese firm is trying to buy a finance company,” a stockbroker told the Business Times, adding that they are desperate to find such a firm which hasn’t signed a memorandum of understanding with another entity (which intends to buy them out in this financial sector consolidation process). Another broker said that a sushi bar called the ‘Samurai’ will be opened next to Jetwing Hotel in Negombo soon and a 35 room hotel worth Rs 400 million is to be opened by a Japanese investor consortium. More stakes in manufacturing and construction sectors is being looked at, a Japanese investor in Colombo scouting for related businesses said.
“We are discussing with a few Sri Lankan companies in these sectors,” Masami Awano, a Japanese investor who has secured an investment with OpenArc Arc Software Company told the Business Times. He added that these discussions are on either to buy part stakes in existing companies or set up fresh companies.
He said that Japanese investors purchased 19 per cent shares in OpenArc recently in a private placement for US$ 2.5 million, a transaction which was spearheaded by him. He added that a consortium of investors bought into this firm.
The latest deal to hit the market was Japanese firm SG Holdings buying Expo Lanka PLC a few months ago. SG Holdings (Pvt) Ltd (or Sagawa), a leading logistics company in Japan bought 30 per cent stake from principal shareholders of Expo – the Cassim family who collectively disposed this stake of Rs. 6.27 billion. Japan’s Bansei Securities Group bought a 15 per cent stake in Pan Asia Bank for Rs. 930 million mid last year, in a deal structured by NWS Holdings.
Japanese national Takashi Igarashi, also Chairman at NWS Holdings, promoted Sri Lanka as an emerging investment destination through NWS Holdings. “”We have been promoting Japanese investments into Sri Lanka via two Sri Lanka Investment Forums in Tokyo in 2012 and 2011 and this October we are taking 10 parties to Tokyo,” an NWS official told the Business Times. He said that more than Rs. 30 billion investment from Japan into government bonds has come while more than 4,000 of Bansei’s clients in Japan have so far invested Rs. 25 billion in Sri Lankan government securities, according to Bansei officials.