Ravi Abeysuriya to transform capital market expansion
15 Oct 2015 - {{hitsCtrl.values.hits}}
Ravi Abeysuriya, the new President of the Colombo Stockbrokers’ Association (CSBA), said that the industry has great potential to grow as we have a lot of catching up to do when compared to our regional peers.
“From one end people need to move towards a culture change to graduate beyond merely saving to investing,” said Abeysuriya.
On the other hand, listed corporates should further improve on governance aspects to attract savvy investors to participate in the growth of their companies than depending on only bank borrowings. The market intermediaries such as the stockbroking firms and asset managers need to take greater responsibility to ensure a larger number of our population who hitherto are not benefiting from our market directly or indirectly participate in our capital market.
“Our industry is at a crossroad, largely because investors no longer see the value the industry brings to society and only a meaningful change can restore that trust,” he said. When investors do not trust the stock market, they are unlikely to save and invest for their future and achieve their long-term financial goals. The problem is not the stock market; rather it is the minority of people who have aided to cut corners and incorrectly advised clients on reckless practices when trading for short-term gain.
Sri Lanka, being one of the fastest aging countries in the world, Abeysuriya stated, “There will be a massive social impact to Sri Lanka in the not too distant future unless they start investing. People will have lower quality of life and may have to work longer and will have intergenerational stress.”
Whilst better regulation and enforcement of regulation is required, robust governance requires a focus on ethical culture within financial firms such as stockbrokers and asset managers. To restore trust, we need a shift towards greater integrity and accountability. We need a stronger and systematic ethical dimension. Getting back on the right path requires education and leadership that is sustained over many years.
“Most importantly, it requires investors and financial leaders taking ‘values’ as seriously as ‘valuation’ and ‘culture’ as seriously as ‘capital’. Our industry players should serve the interests of our clients for the common good of humanity. We, as an industry, need to become more professional and sell a service and not a product,” he added.
The stock market in Sri Lanka is under-owned versus other frontier market peers and as a result, people in Sri Lanka miss out on the ‘power of investing’, particularly to build long-term savings for retirement. He said long-term institutional funds such as provident funds, insurance companies and unit trusts collectively own only 6.5 percent of the Rs.3.1 trillion stock market capitalization. Similarly, only 6 percent of Rs.133 billion AUM of unit trusts is in pure equity funds in Sri Lanka and only about 25,000 CDS accounts are active.
“The stock market offers the means to participate as an owner in the growth of the companies that make up the Sri Lankan economy. What makes it powerful is that companies are motivated to grow their businesses over time. Stock ownership is the way for individuals to participate in that growth. Of course investing takes optimism about future opportunities. It requires investing wisely, taking a reasonable amount of risk and a long-term view and most importantly getting professional help,” Abeysuriya said.
Abeysuriya is the Director/CEO of Candor Group of Companies, a Fellow Member of the Chartered Institute of Management Accountants, UK, a Chartered Financial Analyst, USA and has an MBA from Monash University, Australia.
He functioned as a permanent member of the Financial Sector Reforms Committee (FSRC), a Prime Ministerial Task Force appointment by Prime Minister Ranil Wickramasinghe. He was also twice appointed as a commission member of the Securities and Exchange Commission of Sri Lanka and was a Director of Sri Lanka Insurance and Chairman of the Investment Committee and was also the former President of CFA Sri Lanka, President of ITESA and Vice President of SLASSCOM.
The Colombo Stockbrokers’ Association is an apex industry body, representing the stockbroking companies licensed and regulated by the Securities and Exchange Commission of Sri Lanka.
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