Strong capital market - a must for infrastructure growth - Executive
Director Ernst & Young Malaysia
CAPITAL MARKET: Sri Lanka should have a strong capital market
especially to fund major infrastructure projects in the country. At
present Sri Lankaâ€™s capital market is not strong as the banking sector,
Executive Director Ernst & Young Malaysia, Chow Hoe said.
He said that in developing countries, the capital marketâ€™s
contribution towards the economy was 150 per cent over the banking
sector. But in Sri Lanka capital marketâ€™s contribution is less than 25
per cent to the GDP, which is quite inadequate, he said.
Hoe who is in Sri Lanka to assist the SEC to implement a Capital
Market Master Plan said that in USA capital marketâ€™s contribution
towards the GDP is very much higher than the banking sector while in
Malaysia it is 50 per cent to the GDP, he said.
To implement the Master Plan in a proper manner, the Asian
Development Bank appointed Ernst and Young Malaysia would assist the SEC
he said. In Malaysia we raise funds for infrastructure projects through
the capital market and those funding agents are listed in the stock
market, he said.
The SEC now is in the process of implementing the Capital Market
Master Plan to enhance the development and performance of the Sri Lankan
capital market, sources said.
To design the Capital Market Plan, the SEC has appointed a full team
with Malaysian expertise. It also set up an operational zone with a
competent director to handle its activities and to monitor it, Director
General, SEC, Channa de Silva told the Daily News.
He said this master plan will be completed in two years, and setting
up the Financial Services Academy is part of the Master Plan. For the
first time in Sri Lanka it would introduce derivatives in Sri Lanka.
Further as a part of the plan they are in the process of grooming
5-10 large companies to be listed in the Stock Exchange. The Sri Lankan
capital market would play a pivotal role in enabling State-owned
enterprises to raise funds, either through equity or debt for building
socio-economic infrastructure to improve the standard of living in the
country, especially outside Colombo, he said.
In addition, public listed companies will also raise most of their
capital through equity and private debt securities, which will also be a
significant employer paying competitive salaries to attract top talent,