- As we begin our travels again, this is the first travel report in almost three years. Ruchir Desai, co-fund manager of the AFC Asia Frontier Fund, visited Colombo in November for an investor conference and, after that, visited Weligama.
- Though I mentioned that Sri Lanka is not out of the woods yet, valuations are at extremely depressed and all-time low levels. The Colombo All Share Index now trades at a P/E ratio of only 4x! All blue-chip companies trade at a P/E ratio of less than 10x, with Ceylon Tobacco and Nestle Lanka, which the fund holds, trading at a P/E ratio of only 6x! And this includes strong fundamentals and RoEs of greater than 15-20% more most blue chip companies.
- It seems to me we are at the bottom of the cycle in Sri Lanka with valuations being so low and inflation and interest rates seemingly peaking out. If and when interest rates do begin to get cut sometime in 2023, it will not be surprising to see a stock market rally in Sri Lanka, given these depressed valuations. READ MORE
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