A new era of the Sri Lankan stock market: SEC DG

SEC Director General Chinthaka Mendis in his speech said the launch marked the beginning of a new era of the Sri Lankan stock market.

SEC Director General Chinthaka Mendis

“For decades we have known what was required for our capital market, we knew very well how we could sophisticate our market. However, we have not done that, simply we were not ready when it really mattered,” he said. 

It was pointed out that SEC Chairman Viraj Dayaratne and the Commission thought during the unprecedented lockdown that this was the best opportunity to do the right thing, connect the dots and finish what had been put off for a long time by way of a SEC and CSE joint initiative. 

“I must say the process was complicated, and there were many constraints and obstacles along the way, however, I’m happy to declare that all the regulatory and operational requirements are now in place to facilitate the new era,” Mendis added.

He said the digitalisation efforts will effectively place the Colombo stock market in line with emerging markets, and will create a new breed of investors far and wide to unveil the untapped potential of the market. 

“What is now required is what Satya Nadella, the CEO of Microsoft, advocates, promoting the use of the digital technology, in his memoir ‘Hit Refresh’. Nadella claims that the intensity of the use of digital technology is what segregates the developed world from that of the developing world today,” Mendis said. “Therefore, we need to increase and intensify the use of digital technology, for that matter we need to educate our people better, and we also need to teach them to invest in the stock market for their dreams. We believe that the habit of making investments should be inculcated in the minds of our children from their formative age,” he added.

Mendis also said the SEC can no longer be restricted to its traditional role of market regulation and take the conventional approach to boost the confidence of investors. “The SEC has been particularly busy over the past few months, starting with the feasibility study of the entire stock market, we have been focusing on technical and regulatory reforms vis-à-vis to make our market business-friendly, particularly to make our market attractive for local and foreign investors,” Mendis said.

In his speech he acknowledged the presence of the Prime Minister as a very great honour for capital markets. Mendis said the overwhelming victory at the recent General Election is evidence for investors’ confidence and support for a stable, and perhaps for a bolder, new Government with a mandate to act deftly and decisively. 

“The country can no longer sustain economic development at the cost of foreign debt. Therefore, Prime Minister, don’t look elsewhere, this is the place to raise capital to fund the ambitious development projects of the Government,” the SEC DG said. 

Mendis also recalled the growth story of South Korea, where President Park picked winners from the stock market, the likes of Samsung, Hyundai, and LG, that had the required potential and innovation to go beyond, and the rest is history.

Mendis said the Prime Minister can do the same, and pick the winners from listed companies by looking at their potential, drive and commitment. “Secondly, we need to incentivise and nurture such winners. Thirdly, we need to free such winning companies to go out and compete with global giants to make headway in economic development, which would change the whole complexion of our stock market, it will convert us to a dynamic entrepreneurial state. The future is in your palms now, and I know no better place to put it,” SEC DG Mendis told the launch ceremony.