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Friday, October 03, 2008 - 4.25 GMT |
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Sri Lanka relatively safe from US financial
crisis |
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The current financial crisis in the US,
which has affected several banks and other
financial institutions around the world, is
unlikely to hit Sri Lanka's financial market
very badly, according to economic experts
and professionals in that country, said an
IANS news report dated October 2.
According to Senior stock broker of the
First Guardian Equities Mohandas Thangarajah,
Sri Lanka's financial market would be
affected "only if the foreign investors and
fund managers pull out their shares from the
stock market here".
"Though the number of foreign investors is
small, it might still hit the financial
market here if they decide to pull out their
investments. At the moment, we do not see
that happening," Thangarajah said.
He added that current US market crisis,
unless recovered forthwith, might inflict
some negative impact on Sri Lanka's apparel
and tea industry exports in time to come.
R. Nadarajah, a retired bank executive, said
the chances of Sri Lanka getting affected
badly due to US financial crisis "are very
remote, because we do not depend largely on
foreign investments to sustain our economy".
Noting that the US crisis was causing
"ignorable negative impacts" in the stock
market during the past one week, he said Sri
Lanka's stock exchange did not function
based on fundamentals, "but on daily
sentiments".
"Therefore, the negative behaviour of the
Colombo Stock Exchange at the moment is not
an unexpected one. It will soon return to
normal if the local companies maintain their
financial stabilities," he said.
Nadarajah, however, cautioned that since the
US crisis has hit several banks, it might
make the people all over the world lose
faith in banks, especially in the
financially unstable private sector banks.
Retired economic professor of the Jaffna
University, N. Balakrishnan, said the
financial market in Sri Lanka's economy "is
relatively small, so is the impact".
"Unless the global financial crisis further
deepened in future, there was no danger for
Sri Lanka. I think we are benefited with
being a small country here," Balakrishnan
said.
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