CSE to take part in a roadshow to Japan
In a last ditch attempt to turn the stock market -in doldrums- around, the Colombo Stock Exchange (CSE) is gearing to go on a roadshow – this time to East Asia. CSE’s Japanese counterparts are organising this roadshow in August and but there is a catch for stockbrokers interested in taking part. The stockbrokers have to pay their airfares and other costs unlike earlier when the CSE somewhat ‘pitched in’ with funds. The story has it that brokers are in two minds with this latest turn of events. “We can’t afford it,” one senior broker told the Business Times. He said that already they are finding it hard to sustain business ‘and to participate in a roadshow in a foreign country might just burst their purses’.
This seems to be a chicken and egg situation as the CSE says that they too are drying up without funds and cannot afford handouts. “We are still finalising the details,” a CSE official told the Business Times on the sidelines of a media conference when the Central Bank Governor Dr. Indrajith Coomaraswamy visited the CSE on Thursday. Dr Coomaraswamy in his address while acknowledging that ‘this isn’t the best of time’ (for the CSE), said the critical thing is to create the fundamentals. “I don’t think there are quick fixes and that trying to create sugar highs by artificially boosting asset markets or growth will not help.
I think trying to create a rise artificially; trying to boost asset markets, growth or anything else is not helpful. In the end it creates distortions. So the critical thing is to create the fundamentals to ensure that the economy grows, companies are able to do their business and to net their profits. That there is employment generated that creates demand in business. To have a virtuous cycle, which is created on strong and sound fundamentals,” he said. He was not all gloom either. “The sun isn’t shining yet, but it’s beginning to,” he said, adding that the 5-year economic plan to be rolled out by Prime Minister Ranil Wickremesinghe in a few days would give the business community much-needed policy stability and guidance on the future along with the stabilisation programme that the government has embarked on.
“Without stabilisation in the economy, nothing is possible and at the heart of that stabilisation is consolidation. This is the problem we had for three to four decades and it seems that the Government is making an effort.” He said that at CSE being at these multiples can be argued as a buying opportunity. Once the Government’s reform programme becomes clearer it would promote confidence among the business community and encourage investors, both local and foreign. “Of course, you have to make an independent assessment of the credibility of the stabilisation programme, of the viability of the 5-year plan, once you can take that call and see the way forward is positive. So, to reiterate I hope you are not up to any quick fixes,” he said.