Emerginvest Blog

The selection for this week’s version of Emerginvest’s country highlight is no larger than the size of West Virginia, however it has dominated Emerginvest’s top growth list for the last month as one of the best performing countries.

Sri Lanka is one of the smallest nations that Emerginvest tracks, with only 20.1 million people, and a GDP of $32.3 billion. The economy is largely dependent on tourism and services – accounting for 60% of their GDP. Manufacturing and Industry accounts for 28% of GDP, with products like rubber, chemical, leather goods, and food processing. Agriculture accounts for the remaining 12% of the nation’s GDP, with staple products rice, tea, rubber, coconut, and spices.

Sri Lanka was hit just as hard as the rest of the world during the economic plunge of the last few months, losing 44.5% of its value since its high in April of 2008. However, the market seemed to have bottomed out in mid December and has been skyrocketing in an outstanding rebound since.

Last week was one of the worst of the New Year for world markets. The Emerginvest countries page demonstrated that only sixteen of the 90+ markets were positive, with over 30 markets losing at least 5% of their value in the week alone. In this turbulent time, Sri Lanka gained +14.85% of its value – nearly double the second-closest growth nation, Palestine, with +7.96%. Yesterday alone, Sri Lanka gained 4.01% of its value – the fourth largest gain in the world.

This incredible growth has been sustained for the past month. In the last 30 days, Sri Lanka has been the largest growth market – gaining an incredible 18.57% of its value. Only seven markets – all frontier – had a gain of more than 5%, and only two others had over 10% (Lithuania and Estonia).

While the growth has persisted over the last month, there are clearly some signs of an eventual overheating. That kind of incredible growth is hard to maintain on the medium-long term horizon. However, with returns of over 10% in a single week, it is certainly worth researching for a short term investment.

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Filed under: Frontier Markets, Jonathan (Marketing), World Analysis