Most Sri Lankan companies in sectors such as banking and finance, hotel, power and the services will record substantial profits in the coming quarter, according to stockmarket analysts.
“The banking and finance sector will see a lot of growth while the hotel sector which was ‘neglected’ will also see good profits,” Eardley Kern, Head of Sales and Marketing, Lanka Securities told the Sunday Times FT.
He noted that the room rates have increased by about 100% while most hotels are recording a 100% occupancy, adding that August tourist arrivals increased 34% (year-on-year) to 41,207 persons.
Mr. Kern said as there is a drought in tea producer Kenya, Sri Lanka stands to gain. “The power sector will also grow with many projects commissioned to start soon which in turn will jump-start the manufacturing sector,” he added. Analysts said that the continuing retail interest in the hotel sector especially after the war has seen the index rise by 173% (August 2008 –August 2009) whilst the All Share Index has risen 92% during the same period.
They said that local firms have managed to record a steady growth of 20% on average over the years in the midst of a raging war, which shows the resilience of the corporate sector.
“As such the prospects in the post – war scenario is certain to significantly increase profit growth potential and most businesses are gearing up for more investments to realise their potential,” an analyst said.
The analyst said that many corporates such as Carsons (for property development), E.B. Creasy (road construction and paints through Lankem) and Hemas Holdings (hospitals) will venture to Jaffna and such firms can see their earnings increase by over 25% annually, over the next four years. |
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