CSE Chief says positivism is need of the hour

By Shabiya Ali Ahlam
As the global and local economic outlooks continue to be grim for Sri Lanka, the Colombo Stock Exchange (CSE) Chief yesterday stressed positivism of any form is essential at the moment to help turnaround the dampened situation faced by bourse.

“It comes down to sentiments and at the moment it is not so good. The activities taking place are not enough and have yet to pick up. At this point of time we are hungry for some positive news,” CSE Chairman Vajira Kulatilaka told Mirror Business, admitting that investor sentiments have not improved since the new year.

According to him, attracting the International Monetary Fund (IMF) standby facility and resuming construction on the stalled Colombo Port City project would increase confidence in finance, tourism, logistics and information technology stocks.

However, he said that conditions of the outside world, in addition to the dampened local front, have inclined CSE to see this year as “one of challenges and implementation”.

Foreign investors moving away from emerging markets add to the challenging situation, he said adding that the CSE is striving to get the turnover to increase.

“Not only the industry players but the CSE is also suffering and this is a challenge,” he asserted.
An average Rs. 800 million turnover witnessed at the end of January was not enough for the 29 stockbrokers to be profitable.  The Risk Weighted Capital concept that will be brought back is expected to push brokers to rethink their capital base.

Furthermore, he opined that the nation is likely to receive more bad news, world related, in the next few month which will have a spill over effect on the country.

On the implementation exercise that is taken to move the stock market towards a positive growth trajectory, Kulatilaka shared that the CSE and the Securities and Exchange Commission (SEC) have gathered steam in bringing in the new SEC Act that will provide a level playing field to the market.
It was revealed that the two agencies have picked up their pace in this regard to ensure that the Act is tabled at the parliament within the year.  Kulatilaka noted that any delays, if at all, would be due to the bureaucracy.

“The government has to give priority to this as it is imperative. But there is a waiting list for a number of Acts to be passed so we are unsure how this might go about. If the government is also supportive we can do it this year,” Kulatilaka said confidently. Furthermore, it was highlighted that a lot of work has been taking place in the area of risk management, to bring it up to world standards.

“These are important aspects and big jumps in the history of CSE. Overall we are excited with the things happening around. With CCP we expect a lot of liquidity changes, lot of new products to come which will help the local capital market to boom,” shared Kulatilaka.