Sri Lanka's government is reportedly hoping for an international stock market listing for Sri Lanka Telecom, the country's monopoly fixed line operator.

The government is optimistic that peace talks to end the two decades-old conflict with separatist Tamil Tiger guerrillas can bring economic benefits by stimulating interest from foreign investors.

"We want to go in for an international listing, if consultants advise us," Kumar Abeysinghe, secretary to the ministry of mass communication, told Reuters.

"We are keeping all options open."

Phone firms under pressure

The listing plan comes at a tough time for big international phone firms, which are trying to chip away at debt mountains built up during the late 1990s.

Their share prices - and ability to raise capital - have been hard hit by recent falls on European and US stock markets as critical investors have put the industry's big names under pressure to trim debt.

But Sri Lanka's stock market has bucked the global trend, rising 36% so far this year to hit five-year highs.

Sri Lanka Telecom is majority owned by the government, while Japan's NTT owns 35% of the firm, and staff have a small stake.

The government has pencilled in a domestic listing on the Colombo stock market, and Mr Abeysinghe confirmed that it is being timed for October or November.

Setback

Altogether, the Sri Lankan government hopes to raise about $220m this year from several privatisations.

Mr Abeysinghe was speaking a day after the government was forced to postpone the sell-off of 13 bus companies owing to lack of interest.

A court has ordered the government to readvertise the sale of the loss-making bus firms, which operate about one third of Sri Lanka's buses and employ about 38,000 people.

The domestic listing of Sri Lanka Telecom will be one of the government's showcase privatisations.

Analysts have valued the firm at $400m. It made profits of 2.1bn rupees (�14m; $22m) in 2001.