Sri Lanka back on investment radar

December 6, 2009 (AFP) - Sri Lanka is back on the global investment radar after government forces in May ended a nearly four-decade separatist war with Tamil guerrillas, fund managers and analysts say. Sri Lanka's small stock exchange has become one of the world's top performing bourses, climbing over 96 percent this year as it reaps a peace dividend from the ending of the island's bloody ethnic conflict.

"With the war coming to a close, there is a lot of interest in Sri Lanka. It is like the hottest place to invest your money," said Mark Mobius, executive chairman of global mutual fund giant Templeton Asset Management Ltd.

Investors are banking on renewed economic strength and profits in the country now that the protracted civil war which claimed up to 100,000 lives is over.

"Sri Lanka clearly interests investors on the macroeconomic level now with interest rates and inflation coming down," said Channa Amaratunga, an analyst at Colombo-based CT Capital Private Ltd.

"The end of the war has opened up endless investment opportunities across real estate, healthcare, plantations, infrastructure," said Amaratunga.

Mobius told AFP the Sri Lankan government still needed to rel