Sri Lanka needs to become efficient financial market
The global economy is currently in unchartered territory and to assist the country Sri Lanka needs to help the financial sector become an ideal and efficient financial market, according to Felix Stephen, Head of Strategy and Research at the Australian Advanced Asset Management (AAM) company.
Speaking at recent fund management forum in Colombo organized by Entrust Ltd titled “Asset Allocation and Risk Management in a complex, volatile and challenging world”, Mr. Stephen noted that “we have to gain an insight into the workings of financial markets in order to navigate tough times”. He said helping the financial market develop will in turn distribute savings and capital to the industry which will create a cycle of investment and growth.
Mr. Stephen said that, “Sri Lanka is the ideal template to take our message across the continent”.
He further noted that with regard to asset management and investment “diversification across asset classes tends to insulate you from volatility”. Yet, he also added that volatility is symptomatic of a world that is evolving at a rapid pace, saying, “volatility is here to stay”.
Speaking at the event Peter Folkes , Head of Business Management at AAM noted that “we believe there is a level of intellectual prowess that AAM brings to the table and we want to understand the Sri Lankan market to see if we can add any value given our skills set”
A Securities and Exchange Commission (SEC) official participating in the forum elaborated on the interest in fund management in Sri Lanka after the war with the number of companies engaging in fund management having expanded to 13 with a total of 40 funds managed.
Yet the official expressed dissatisfaction with the number of unit trust (mutual fund) holders in Sri Lanka citing poor awareness amongst the general public as a contributing reason.
The cultural mindset with regard to investment in Sri Lanka was also discussed with panellists noting that Sri Lankans are generally not perpetuated to take variable interest over a long period of time but are still locked in the fixed return mindset.An Entrust official stated that “this is the first time in Sri Lanka that this subject is being dealt with in depth and will help develop skills and expertise for professionals”. The official said the economy is just taking off , so getting all the stakeholders involved is good and this a good opportunity for both Entrust and the industry. (SP)