EPF, ETF must prove their case to 'return to capital market' : PM
Given the investigations and the 'bad record' by superannuation funds in the past the Central Bank has to be 'convinced' about the capital market to invest in it, Prime Minister Ranil Wickremesinghe has told stockbrokers recently.
He said this on the sidelines of a dedicated meeting after the ' Invest Sri Lanka' Investor Forum organised by the Colombo Stock Exchange ( CSE), the Securities and Exchange Commission (SEC) and the Singapore - Sri Lanka Business Association (SLBA) held at the Four Seasons Hotel in Singapore. This was said with regard to the brokers wanting state funds (EPF and ETF) to return to the capital market.' He had said that the CB officials need to be in a comfortable position to invest the EPF and ETF funds in the market. Making the keynote address at the event, Mr. Wickremesinghe said that Sri Lanka is on the path of becoming an attractive place for business in South Asia, one of the fastest growing regions in the world. The brokers had a chance to discuss certain issues such as increasing liquidity in the market by listing state- owned enterprises ( SOEs), speeding the Dollar Board and the Small and Medium Enterprises Board, expediting Delivery Versus Payment (DVP) and introducing new instruments such as Exchange Traded Funds, and equity derivatives etc.
Mr. Wickremesinghe in response to going public with SOEs had said that initially Hilton and Hyatt's holdings by the state will be relinquished and others will follow. Mr. Wickremesinghe had also said that in a bid to devote more time to capital market and related matters, he's contemplating assigning the SEC to a dedicated ministry.
The brokers had expressed concerns on the split of 80-20 share for demutualisation which the SEC hadn't agreed to. The regulator said that they will give 60-40. This process has been dawdling for a while now owing to dissent between the SEC and brokers over the percentage that the latter should own after demutualisation with brokers arguing that they deserve more as they started the CSE more than three decades ago without any assistance. But the regulator is adamant that 60 is the number they'll get. Each broker will get a maximum of 5 per cent if they agree to the 60 per cent. The brokers had requested the CESS fund of Rs. 2.3 billion to be channelled towards capital market development. Write to PM
Mr. Wickremesinghe had directed the brokers to send a paper with all their suggestions. They told the Business Times that it'll be done by this week.
The Prime Minister in his address outlined the commitments made by the Sri Lankan government towards economic reforms and improving the ease of doing business in Sri Lanka. "We are very focused on fiscal consolidation, and the results are already visible - the tax to GDP ratio has improved, and ratings agencies are providing favourable outlooks. Next month, a new Inland Revenue Act will come into effect, providing a progressive, modern, and transparent income tax policy," he said. "By mid-2018, the time taken to register a new business will reduce from 6 days to just one day," he said. Finding land and registering property will be halved from 51 days to 26 days, and the procedures reduced from nine steps to two steps. "We are introducing an 'Electronic Single Window' that will link dozens of state agencies dealing with international trade through a few clicks," the Prime Minister added noting that the Singapore-Sri Lanka Free Trade Agreement (FTA) is the country's first agreement with a South East Asian country. "And we envisage this as a first step towards closer integration with the Regional Comprehensive Economic Partnership Agreement."
Minister for Trade and Industry in Singapore S. Iswaran speaking at the event stated that the Singapore - Sri Lanka FTA is a clear demonstration of Sri Lanka's commitment to re-integrate into the global economy and bring more economic opportunities for its businesses and the people of Sri Lanka.
"For Singapore, this agreement marks another step-forward in our commitment to free and open markets, and to deepening our bilateral ties with Sri Lanka, and through Sri Lanka into the South Asian region. We are already starting to see the benefits of the Sri Lanka-Singapore Free Trade Agreement the positive news surrounding the agreement has led to an uptick in interest from Singapore companies to partner Sri Lankan companies to invest in opportunities both withi Sri Lanka."
CSE Chair man Ray Abeywardena speaking at the event stated that a new and improved backdrop of cooperation between Singapore and Sri Lanka will deepen economic ties and facilitate greater investment flows between the two nations. Commenting on the stock market, Mr. Abeywardena said, "We entered 2018 on the back of a record year last year in terms of foreign investment.
Foreign investors bought into Sri Lankan equities last year more than any other year in our history, which is a strong endorsement of the value proposition the stock market offers at present. Sri Lanka is presently being pin pointed by investors and market commentators around the world, as one of the most attractive frontier markets. And the investment case for the Sri Lankan market is only getting stronger."
Governor of the Central Bank Dr. Indrajit Coomaraswamy, SEC Director General Vajira Wijegunawardane, CSE CEO Rajeeva Bandaranaike and the Head of Investments at Softlogic Holdings PLC Ms. Niloo Jayatilake also featured in an engaging panel discussion moderated by the Chairman of the Institute of Policy Studies in Sri Lanka Dr. Razeen Sally.
A series of investment focused, pre-scheduled one-onone/ group discussions between investors and participating Sri Lankan listed companies were also organised as a part of the Investor Forum, where a number of leading international and Asian Institutional frontier market focused funds and other investors showed a keen interest in discussing the investment opportunities available in Sri Lankan listed companies. John Keells Holdings PLC, Commercial Bank, Hatton National Bank, Hemas Holdings PLC, Sampath Bank, DFCC Bank, National Development Bank, Access Engineering PLC, Tokyo Cement Company ( Lanka) PLC, Seylan Bank, Lion Brewery Ceylon PLC, Hayleys PLC, Singer Sri Lanka PLC, Softlogic Holdings PLC, LAUGFS Gas PLC, Sunshine Holdings PLC and MTD Walkers PLC attended the events.