Sri Lanka is expected to have private equity deals amounting to $ 250 million in 2024 as the country is among the top destinations for Asian private equity after the Bank of Japan (BoJ) rate hike, Hong Kong-based asset management firm MCM Partners said.
Speaking to Bloomberg yesterday (25), MCM Partners Managing Director Jahnavi Bhagwati said that countries like India and Sri Lanka, which is a turnaround story, are going to present opportunities in the private space in 2024 after the BoJ rate hike.
Accordingly, BoJ ended eight years of negative interest rates last week, making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus as it sets a new short-term rate target in the 0-0.1% range.
Bhagwati said that already a pick-up is seen in the Asian stock markets with inflation curbed and rate cuts which will kick in and spur investment activities.
She noted that they are already seeing a flurry of more activity in 2024 in the private market space than in 2023, “2023 was a very very difficult year with the exception of Japan where they up I think 183% in terms of deal size, the rest of the market were suffering but we are seeing a turnaround now in terms of investor interest, in terms of people wanting to look for opportunities,” she added.
“I myself have been asked in Sri Lanka for different investment opportunities,” she said with the IMF commitment of almost $ 3 billion although the country needs to adhere to some points for the provisions of that loan.
“Therefore, Sri Lanka has several huge assets which are being divested and a lot of institutional players and investors are looking to come in which will also spur activity there,” she added.
She said that the country is expected to see private equity deals amounting to $ 250 million in 2024 while in Bangladesh it will amount to almost $ 1 billion.
Bloomberg Economics expects the Central Bank of Sri Lanka (CBSL) to maintain its policy rates on Tuesday (26) as a rate cut will spur capital outflows and boost import demand putting more strain on the reserves which have less than two months of imports in usable dollars.