What to look out for in a good investment in Sri Lanka and which industry segments to focus on:
Potential lucrative industries do exist in Sri Lanka contrary to popular opinion
- Sri Lanka boasts a very active Stock Market that has some companies that boast very high ROEs – some of Sri Lanka's largest blue chip companies are quoted.
- Sri Lanka has a booming BPO industry that is second to none and boasts the largest pool of qualified Chartered Accountants outside the UK and also has a large number of IT and Software Engineers that have qualified in the US or UK
- Sri Lanka garment industry has been battered and bruised but has come out winners as large international chains opt to deal with Sri Lanka Apparel due to practicing of the motto “Garments without Guilt” – The apparel industry should also boast the motto “What doesn't kill us makes us stronger” Some of the largest Apparel companies in the world have their products sourced through Sri Lanka.
- Sri Lanka also boasts immense fisheries resources that has not yet been fully exploited and still great potential exists for yellow fin tune, prawns, shrimps, crabs, oysters etc.
- Energy generation projects such as hydro power and bio mass as private public partnership projects are very popular if you are interested in large infrastructure based projects.
- Tea and rubber value added products still boast high returns although the estates have been battered by lower prices exporters have been reaping high rewards.
- Education sector is experiencing a boom as government sponsored free education has failed spectacularly more and more prospective students and parents are looking for the private sector for better educational alternatives and are willing and able to pay high fees.
- Health sector – potential exists for large scale projects as the existing health infrastructure provided by the government is woefully inadequate to meet the demand for health services.
What type of investments to avoid in Sri Lanka:
- Avoid speculating investing in the stock market based on rumours as many pump and dump specialists operate in the Stock Market and are gradually being weeded out. Invest based on real value stocks based on high ROE of the company
- Forex investments are illegal based on Sri Lanka law even though many people make investments in forex through the internet. Ensure that you have good advice on how to invest and avoid it at all costs if you do not really understand the true complexities of the forex markets.
- Ponsi Schemes – there are still plenty of ponsi schemes that are operated by finance companies in Sri Lanka – ensure that the finance company that you intend to invest with is registered with the Central Bank of Sri Lanka and has credible and professional management board.
- MLM schemes – are operated by some trading companies promising high returns for those salesman or women who promote their products but have large front end fees that are required to be paid by potential salespersons – needless to say avoid these companies.
- Foreign employment and investor migration services – are another risky investment as more and more fraudsters are operating in this market ensure that you have checked the credentials and also check if they are registered with the right government authorities.
- Research online – as more and more people complain online a vast store of information regarding predatory companies is available online. So do some research before making your investments.
I hope that some of the pointers above about investing in Sri Lanka send you in the right direction – if you have any other questions don't forget to ask.