RISING STAR OF THE FRONTIER MARKETS
By: Prabodha Samarasekera, CEO NDB Wealth Management
A new virtues cycle is driving Sri Lanka’s growth at breakneck speed. Known for its exquisiteblue sapphires, tea gardens and beautiful beaches, the countryis being transformed thanks to the growth in six key sectors: Aviation, Maritime, Knowledge, Tourism, Commercial and Energy. The country is on overdrive.
With the transformation of the economyin the key sectors, the banking sector assets have grown more than 50% in the past four years while the formal asset management sector experienced explosive growth with the rapid increase in funds under management as well as a slew of new service providers entering the fray.
The Government of Sri Lanka and the Securities & Exchange Commission of Sri Lanka has come out in full force to support the asset management industry by offering generous tax incentives, creation of market awareness, and speed regulatory changes necessary for asset growth. The Mutual Fund Industry, which is licensed by the Securities & Exchange Commission of Sri Lanka, for example, has issued many new licenses with the number of mutual fund managers tripling and their assets under management quadrupling in the past four years. The underlying asset markets, specifically Government of Sri Lanka debt and corporate debt markets have grown in breadth and depth due to the liberalization of these markets where foreign investors are permitted to enter directly or through mutual funds.
NDB Wealth Management has taken the leadership in the asset management industry in Sri Lanka with the largest asset base under management and leads the mutual fund business with around 35% of the industry assets. With over twenty years of experience, superb research capabilities, world class systems and high level of client service, NDB Wealth has earned the reputation as being the leader in the Asset / Wealth management business in Sri Lanka.
In the recent years, the Wealth Management industry in Sri Lanka has evolved where the strong presence of the Retail Banking industry is being complimented by the Wealth Management products and Securities Trading to offer banking clients comprehensive financial solutions. NDB Wealth Management has been the catalyst in Sri Lanka, in driving the convergence process between Retail Banking and Capital Markets with the NDB Groups Retail Banking and the Securities Trading units being brought in to confluence with Wealth Management.
The total banking assets in Sri Lanka are estimated to be around USD 46 Billion while the total wealth management business including the mandatory government provident funds and insurance fund assets make up around USD 10 Billion. With the high expected GDP growth rates, it is forecast that the Sri Lanka’s Per Capita GDP to reach USD 4,000 by 2016 giving a further impetus to the convergence model which NDB Wealth Managementhas pioneered in Sri Lanka.
NDB Wealth’s Private Wealth Management service has shown remarkable growth in line with Sri Lankas rapid economic growth where the sale of wealth management products have been made easy due to the HNW clients having the requisite knowledge, wealth and appetite for risk while the mass affluent retail market is being gradually inducted in to the concept of wealth management via low risk and highly liquid money market accounts.
Ultimately, Sri Lanka being at the center of the East-West trading route is expected to enjoy tremendous growth in the next ten years with the evolution of its six sector strategy. This growth will accentuate the speed at which the structure of the economy moves to a service oriented economy where financial services will represent an important vertical. NDB Group together with NDB Wealth Management visions on being at the center of the Financial Hub of Sri Lanka leading its growth.