CSE gains investor eye

Malik Cader

Sri Lanka’s capital market is poised to take off in the near future and the country needs to look good to attract foreign companies, Securities and Exchange Commission (CSE) Director General Malik Cader said.

Speaking on “New developments and challenges in the capital market” during a plenary session at the Sri Lanka Economic Summit 2011 yesterday, Cader said the CSE targets fifty companies to be listed in 2011 and already 25 companies have been listed.

Another large number of companies are awaiting to be listed in the stock market.

“The CSE is gaining confidence from foreign and private sector investors now,” he said.

Towards this target the CSE focuses on five strategic goals which include improving capital market infrastructure and encouraging broadening capital market out of Colombo.

It will also increase capacity of the CSE and improve liquidity as well.

The Economic Summit focused on ‘Driving growth through fast track implementation’ where eminent speakers addressed representatives of a large number of private sector companies.

Cader said exchange rates will be gazetted next month and then the new products including gold will be traded in the stock exchange.

This will mitigate risk in the capital market. He said that once the infrastructure is ready Sri Lankan shares will be traded in London and London shares will be traded in Sri Lanka where there will be two screens in both countries.

Benefits of this will be enormous because the Sri Lankan capital market will get enormous exposure. It is proposed that Sri Lanka should have an international board.

The unit trust industry which was not given priority earlier will also be developed in the future.

Referring to the challenges he said the country was not prepared to face the unusual price fluctuation during the past.

The poor knowledge on capital market among stakeholders and the lack of new products are some of other challenges.

Some of the initiatives already taken includes reduction of transaction cost by 40 percent, introducing a new code for unit trusts, lodging all securities with Central Bank securities, introducing price bands and investor education and workshops for stakeholders on the stock exchange are some.

IMF Resident Representative for Sri Lanka and the Maldives Dr Koshy Mathai and India’s Standard Chartered Bank Regional Research Head Dr Samiran Chakraborty also spoke on ‘Credit appetite to long-term lending’ and ‘Appropriate interest and exchange rates’ respectively at this plenary session.

Adopted from Daily News