SEC and CSE return after nearly nine years with an Invest Sri Lanka roadshow – and this time there is a useful benchmark against which to measure whether the exercise actually works
COLOMBO – Sri Lanka’s capital-market authorities are returning to Australia this week in search of investors, nearly nine years after their last major promotional effort there produced a sharp increase in Australian participation in the Colombo market.
The Securities and Exchange Commission of Sri Lanka, the Colombo Stock Exchange and representatives of the stockbroking industry are holding a series of Invest Sri Lanka forums in Sydney and Melbourne from August 17 to 20, seeking to present the country’s post-crisis investment case to Australian investors.
Overseas investment forums are hardly unusual. Delegations travel, presentations are made and meetings with prospective investors invariably produce optimistic statements about interest in Sri Lanka. What makes the Australian exercise more interesting is that there is a previous performance against which the latest campaign can eventually be measured.
Following the 2017 Australian roadshow, Australian investor buy turnover on the Colombo market reportedly increased from Rs.72.9 million to Rs.603.8 million during the following six months – an increase of more than 700 per cent.
That provides the organisers with something many investment-promotion exercises lack: a numerical benchmark.
The timing is also important. Sri Lanka is attempting to rebuild international investor confidence after the sovereign default and economic crisis, while the Colombo market has experienced substantial changes in valuations, activity and investor sentiment. Convincing international investors that the recovery represents a sustainable investment opportunity rather than simply a rebound from crisis will be central to the sales pitch.
Foreign portfolio investment also has a broader significance. Sri Lanka needs foreign capital across several channels, from direct investment in businesses and infrastructure to participation in listed companies and government securities. A deeper pool of international investors can improve market liquidity while widening the sources from which domestic companies can attract capital.
But overseas roadshows should ultimately be judged by what happens after the delegation returns home.
The 2017 figures demonstrate that Australian investors can respond when the Sri Lankan proposition is sufficiently attractive. The challenge in 2026 is to establish whether that appetite can be rebuilt in an international environment where investors have an enormous range of competing emerging and frontier-market opportunities.
The SEC and CSE therefore have an opportunity to make this roadshow unusually transparent. Rather than merely announcing that meetings were productive, they could publish the level of Australian participation in the Colombo market six months from now and compare it directly with the position immediately before the campaign.
That would tell investors, policymakers and the public whether the roadshow produced more than interest.
THE NEWSLINE QUESTION
If the last Australian campaign was followed by a 700 per cent increase in buying, what is the target this time – and will the CSE publish the result six months from now?
