COLOMBO (XFN-ASIA) - Central bank governor Nivard Cabraal said he expects Sri Lanka's financial markets to stabilize quickly and recover after yesterday's audacious air attack by Tamil Tiger rebels on a military base near Colombo.
Terming the incident as a 'minor setback', he said he is hopeful that the country can bounce back.
'There is no crisis of confidence after Monday's attack,' Cabraal said. 'People who invest in Sri Lanka have already factored that in, and put their money for the long term. We expect our growth momentum to continue.'
Tamil Tiger rebels carried out their first air raid early Monday, bombing Sri Lanka's main military air base in a daring night-time mission that halted international air traffic into the island for three hours.
The attack spooked punters at Colombo's stock market, with the main index shedding 37.89 points or 1.32 pct to close at 2,824.85 on paltry turnover of 228 mln Sri Lankan rupees.
Private analysts fear tourism and foreign capital inflows could slow down in the short term.
'The latest attack is also a psychological blow (for the government and investors). I am not bullish on the short-term,' noted Murtaza Jafferjee, managing director at J B Stockbrokers.
Alastair Corera, director of Orion Fund Management, said the rebel attack has revived fears of more violence outside the embattled northern and eastern regions.
'When there are no events (outside the northeast) people seem to underestimate the risks that prevail, and incidents like this remind us of the risks,' Corera said.
The Sri Lanka Tourist Board was quick to calm holidaymakers and rushed journalists to the international airport to show that things were 'normal.'
'It is bad, (but) it could have been worse if the airport was attacked,' top tourism official Renton de Alwis said. 'We hope our partners (tour operators) will be with us.'
Yesterday's attack, which killed at least three air force men and wounded another 16, was a sequel to a suicide bombing of the same air base and the adjoining Bandaranaike international airport in July 2001.
After the 2001 attack insurance firms slapped war-risk surcharges on airlines and ships calling at Colombo.
An analyst said that yesterday's incident may not trigger a similar reaction.
'I don't see a need for insurance firms to come rushing in and raise war risk premiums, as the attack was limited to a military base, not an economic target like the airport,' economist Muttukrishna Sarvananthan said.
Earlier this month, Fitch Ratings warned that Sri Lanka's international credit assessment could take a further beating if it fails to make tangible progress in settling its decades-long separatist conflict.
SEO SRI LANKA
No comments:
Post a Comment