Japan’s Bansei Securities Group which is one of the oldest licenced securities brokerage company in Japan (about 110 years), plans to invest in a Japanese-style hotel on the west coast soon, Takanori Shimizu, Advisor to Bansei Securities Company Ltd in Tokyo told the Sunday Observer.
Group Chairman and one of the most successful businessmen in Japan, Toyohiko Murakami will develop a Japanese-style gorgeous hotel near Colombo, says Shimizu who was in Colombo recently.Through this project, Bansei plans to play a major role in Sri Lanka’s tourism sector and bring down Japanese tourists who love Lankan hospitality, spa culture and exotic travel experiences, he said.
Japanese arrivals in Sri Lanka have increased significantly over the past few years and more recently, Colombo has seen the emergence of many Japanese restaurants which cater to locals who love Japanese cuisine, expatriates and other tourists. Bansei has already invested in Sri Lanka’s tourism industry in Coral Rock Hotel at Hikkaduwa and more recently in the famous Geoffrey Bawa Hotel, in Bentota.
More investments
Apart from tourism sector investments, Bansei is also continuing to invest in Sri Lankan government bonds. The company’s policy is to buy bonds directly from Sri Lanka and to sell them to Japanese investors in Yen in Japan. “We have sold seven year bonds to Japanese investors,” he said.
So far the company has invested approximately Rs. 40 billion in Sri Lanka government bonds.
However, Shimizu says, Sri Lanka’s country rating is not all that attractive for foreign investors to invest in the security finance market.
“However, we have taken a decision to invest looking at the long-term benefits of these investments,” he said.
The depreciation of the Sri Lanka Rupee, however, remains a headache for Japanese investors; “from the market intelligence we get through the Central Bank of Sri Lanka, we expect the Rupee to depreciate further for a while - by 3 percent or more.”
He said the lavish lifestyles of the leaders of the past regime have contributed significantly to the current economic issues in Sri Lanka. However, Shimizu has confidence in the present leadership and the President and the Prime Minister in particular.
“We are confident that together they will take the country out of its debts and develop it to be a successful model where all people can be part of, and benefit from that development,” he enthused.
Cleaner government
Japanese investors want a higher rate of return for their investments, adds Shimizu.
“We are hoping that it would be possible with the policies and accountability practiced with the present government, to gain that return,” he said.“Sri Lanka has a good chance to bounce back over the next three years, and overcome the present economic issues and attract more investment into the country.
The next 5-7 years would be crucial for Sri Lanka,” Shimizu, an expert investment fund manager, predicted.
“Most of our investors (Japanese) are individuals and they are aware of these market conditions; they are intelligent and know, how the markets work in Sri Lanka.”Asked if bond scam issues and current investigations into so-called ‘scams’ deter their investors from coming to Sri Lanka, he said, “it is not a factor to be concerned about.”
“Our decision-making process won’t be disrupted by the country’s bond scam issues.
“We do business and investments; we do not take political aspects when we choose business partners, we want stability and policy systems in place,” he said referring to their business partners in Sri Lanka.
Japan-Sri Lanka economic similarities
He compared Sri Lanka’s present situation to Japan’s economy in the 1960s. “We were a weak economy after the war and it was only after 1971, we started becoming stronger. Sri Lanka is now going through a similar experience. Sri Lanka also should take measures to attract more investors into financial market activities; one of the key points is to open government bonds without withholding tax for foreigners. ”During his stay in Sri Lanka, Shimizu met Finance Minister Ravi Karunanayake and Central Bank Governor, Dr. Indrajith Coomaraswamy to discuss ways of increasing Japanese investments in financial markets in Sri Lanka.