Fresh talks on capital markets

Monday, 22 October 2012 00:00 - - {{hitsCtrl.values.hits}}

Development of capital markets will come under a fresh round of discussion on Tuesday at a meeting to be chaired by Treasury Secretary Dr. P.B. Jayasundera.

The Daily FT learns that the latest discussion will be under the aegis of the National Council for Economic Development (NCED), which has several industry clusters. This is the first time capital markets will be discussed under the banner of NCED.

Securities and Exchange Commission Chairman Dr. Nalaka Godahewa, the Commissioners and senior officials, Colombo Stock Exchange Chairman Krishan Balendra and senior officials, representatives of the Colombo Stock Brokers Association, Unit Trust Association, and the Margin Providers Association are expected to attend the meeting.

Analysts expect the meeting to focus on broader capital market development initiatives apart from taking stock of some of the decisions made during the previous meetings held by Dr. Jayasundera following the President and Finance Minister Mahinda Rajapaksa-chaired capital market stakeholder forum in Temple Trees in mid-July. Some of the stakeholders are likely to suggest a few proposals for consideration in the 2013 Budget, which will be presented on 8 November in Parliament.

Since the mid-July Presidential forum and the appointment of a new regime at the SEC, the Colombo stock market has revitalised itself with return of retail investors whilst foreign investors remain bullish.

Foreign net inflow has expanded to near Rs. 34 billion up by Rs. 10 billion from mid-July. The rebound in sentiments also saw market gaining Rs. 400 billion in value.

However, a fuller recovery remains elusive as the year-to-date negative return languishes at 7% level still after reducing it to below 2% a few weeks ago.

Most analysts have noted that profit taking, especially by retailers, was understandable after the market bounced back. With selling pressure easing, a fresh round of buying saw indices gain during the last two days of the market.