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