Financial Times

War situation discounted by investors
In a bid to promote foreign direct investments and expand its foreign portfolio, Asia Capital and its subsidiary, Asia Securities signed an agreement last Friday with Auerbach Grayson and Co, a New York-based brokerage firm that specialises in international securities trading for US institutional investors.

“Sri Lanka was missing from our network and during the last 12 months we have had around 10 requests from our top clients to provide direct access to the Sri Lankan stock market,” David Grayson, co-founder Auerbach Grayson told The Sunday Times FT. He said that Auerbach Grayson clients wanted to enter the Sri Lankan market because it is ‘relatively undiscovered’ and companies ‘undervalued’. “Many westerners are not aware of a market here and our clients want to go to places where there are little foreign investments and where companies are relatively ‘undervalued’ and they want to go there early to realise the best value,” he said.

Voicing his personal opinion Grayson said he doesn’t believe there will be a civil war in the country. “I don’t believe there will be a civil war in Sri Lanka and the political problems together with the chances of a war is discounted by investors today. We do business in 95 countries and half of them are in emerging markets and we also have businesses in war-torn countries. So largely the war situations, if they are to happen are discounted by the investors,” he explained.

He said that in a month’s time there will be orders flowing into Asia Capital and the Auerbach Grayson clients are looking to invest in banks and telecom companies. “They will not be interested in smaller companies, unless it is a particularly special case such as its growth potential and we will be able to see some orders flowing within the next 30 days,” he said. Dihan Dadigama, Associate Director Asia Capital said this is the first time a local stock brokering house has tied up with a US brokerage.

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