Bold measures vital to develop capital markets - CSE chief
Development of capital markets require bold measures rather than
tinkering with current deficiencies, said Chairman, Colombo Stock
Exchange (CSE), Nihal Fonseka. He was addressing a ceremony to
felicitate former CSE chairmen Rienzie Wijetilleke and Eraj Wijesinghe
at the World Trade Centre.
He said the former chairmen had contributed their best to boost the
image of the organisation and its growth which has brought the
institution to what it is today.
"Though there was a turnover increase and growth in the indices last
year the penetration and turnover of the CSE were not satisfactory
compared to other regional exchanges. The growth achieved was not
substantial according to national economic indicators and investments
made in the advanced technology platform", he said. Fonseka said the
number of investors who trade has not increased and it is only a small
percentage that accounts for most of the market turnover.
"Lack of production, high transaction costs, long settlement cycle
and lack of good corporate governance by certain issuers are some of the
reasons for low market turnover", he said.
The Chairman said the CSE has been collaborating with the Securities
and Exchange Commissions (SEC) to develop the market. The success of the
CSE will depend on how effectively the deficiencies are addressed.
LF
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