Positive signals can change dull market - NAMAL CEO

by Gamini WARUSHAMANA

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The markets are dull and to change this situation it needs positive signals, said CEO, National Asset Management Limited (NAMAL), S. Jeyavarman. Investors today are worried whether the listed companies in Sri Lanka can grow in the prevailing economic situation.

Jeyavarman said that the high interest rates have affected investment plans of companies while high tax and increasing overhead costs related to high inflation have become a burden to businesses.

Our concern is whether all Sri Lankan companies can grow in this situation.

Only companies that can absorb the cost by passing it on to consumers can grow in this situation but not all.

There are some industries that are performing well. For instance, the plantation industry is booming with high tea and rubber prices. Some plantation companies have started oil palm cultivation and palm oil prices are also growing.

In this situation fund managers have to be more selective in investing. Since the cost is a deterrent factor we are keen on the companies that can still grow.

Equity market depends on the performance of the companies and only the companies which can overcome the situation and grow will be able to maintain their share prices at a high rate.

The financial market too has been affected due to several reasons. Firstly, people should have confidence to invest. Secondly, there should be incentives to invest. Savings have dropped as people don't have much money to save due to the high cost-of-living. On the other hand, as interest rates are high, fixed deposits and treasury bills have become more attractive.

In this situation, as fund managers we promote fixed income funds. Today NAMAL has introduced four fixed income funds-NAMAL income fund, flexi income fund, money market fund and NAMAL gilt edge fund.

We invest these funds on fixed income securities such as treasury bills, treasury bonds and asset backed notes. In these funds the investors get a regular income and the capital safety is very high.

Globally financial markets are volatile and in Sri Lanka, the volatility is low mainly because this is a small market as there is no significant foreign investor presence.