|
|
 |
 |
| Sunday, 5 January 2003 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
CSE records Rs. 30 bln turnover
The Colombo bourse experienced a net foreign inflow closer to Rs 2.5 billion last year after a lapse of four years. For many stockbroking companies, 2002 would have been the best year in terms of the bottom line with the exception being foreign brokerage firms which had better business during 1993 and 1994. For many locally-owned brokerage firms, 2002 should be the best year as the cost structure (break even) reduced substantially over a period when the market performed very badly. In terms of revenue, the market had a turnover of Rs 30.5 billion, resulting in brokerage commissions closer to Rs 600 million being shared by 15 member firms of the Colombo Stock Exchange. Rohan Senewiratne, Director Sales Lanka Securities Ltd said that though 2002 was a good year for the stockbroking community, "we should not be complacent as there is much scope and potential for the market to grow". He said attracting more people to invest in equities is fundamental coupled with a much more professional approach by stockbrokers. Each investor, whether an institution or an individual, has to be dealt with by adopting a unique approach. Different investors opt to take different degrees of risks. Hence analysing the risk profile has to be done prior to recommending a portfolio with the most appropriate mix of stocks. The Government Treasury Bill rates have come down to a single digit (9.9 per cent, one year) while many fixed deposits offer very low returns hence investing in equities could be made a better option. The listed companies too have some responsibility in this regard to match or come closer to fixed income returns by paying higher dividends. What matters is the dividend yield and not the dividend itself. This is a crucial factor to attract investors like pensioners who require a current income for daily expenses. When the market offers fairly predictable returns, investors would take a long-term view rather than concentrating on short-term capital gains. These factors coupled with the ceasefire and improved investor confidence can boost the market to greater heights. He said to attract more people to the market, the CSE together with stockbrokers should promote it in rural areas and not confine themselves to urban areas. An example of being successful in rural areas is Matara. At present there are only 260,000 accounts with the Central Depository System, while the adult population of the country is around 14,000,000. This accounts to about 1.84 per cent of the adult population having investments in equity. This is a very low figure compared to some other countries. Although a direct comparison cannot be made, in Sweden 60 per cent of the adult population own company shares while Switzerland and South Korea have similar figures. Speaking of the past year, he said the market performed very well with the banking sector recording a profit growth of 100 per cent, hotels and travel 300 per cent and diversified holdings 200 per cent. The All Share Price Index recorded a growth of 31 per cent and the Milanka Price Index, a growth of 33 per cent over the corresponding period of 2001. (The figures are as at December 30, 2002.) The plantation sector recorded a negative growth in profits due to the wage hike (from Rs. 121 to Rs. 147 for tea and from Rs. 109 to Rs. 131 for rubber sector workers) and the high management fee paid by estates. Senewiratne described 2002 as the best year in his career. He was instrumental in the takeover of Pelawatte Sugar Industries by Ariyaseela Wickremanayake, Chairman of Master Divers, which many regard as one of the most successful privatisations. He was also involved in the sale of a 19 per cent stake in Thalawakele Plantations by the Secretary to the Treasury, and the sale of a 12 per cent stake in Royal Ceramics Ltd by Udeshi Holdings Ltd, thus becoming the top performer of the company. |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
