SEC expresses optimism on the resurgence in Colombo bourse
View(s):By Bandula Sirimanna
The Securities and Exchange Commission of Sri Lanka (SEC) is confident on a resurgence in the Colombo Stock Market in accordance with its 3-year road map aimed at improving the country’s capital market, a top SEC official said.
The stock market is now being stabilized following up and downs in the recent past and public confidence in share trading has now been restored, said SEC Chairman Nalaka Godahewa in a brief interview with Business Times on the sidelines of the launch ceremony of Sri Lanka’s Colombo Stock Brokers Association (CSBA)’s website and their code of ethics in Colombo this week.
He expressed the hope that the market capitalization will hit US$50 billion by the year 2016 with the support of all stake holders.
Dr. Godahewa noted that as of end 2012, the market capitalization of the CSE stood at Rs.2.2 trillion or US$ 18 billion, one of the smallest in the world. He told the gathering of stock brokers that the worst period of stock market was over with 18 months of a decline ending.
He pointed out that many problems that hindered the confidence of investors including the bad feeling, the bad publicity, the difficulties, accusing each other, mistrust excuses are all now history.
He revealed that there are less than 50,000 active Credit Default Swap (CDS) which means around one per cent of the population of the country actively engages in the stock market during the past several years.
He emphasized the need of increasing the CDS even up to 120,000 to reach the expected market capitalization target. The CSBA unveiled the ‘Principles of Best Practices’ for stock brokers with the aim of promoting standards, ethics, values, principles and accountability.
“By introducing these ‘Principles of Best Practices’, we are intent on promoting professional standards among our members,” CSBA president and head of Asha Phillips Securities Dimuthu Abeysekera said
He added “This will in turn enhance investor confidence prompting the industry to undoubtedly enjoy benefits of a vibrant market place.”
Head of Acuity Stockbrokers Deva Ellepola told Business Times that the stock brokers will comply with the code of ethics voluntarily but it is better if the regulator makes it compulsory.
However he pointed out even stockbrokers who were not members of the CSBA also contributed to the code and he hoped they would join the association again. Only 23 out of 28 stock broking firms have given their consent to new Principles of Best Practice, he said. The code was devised by a committee under Ravi Abeysuriya of Heraymila Securities.
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