Stockbrokers hail derivatives trading

Ravi Ladduwahetty

Three Chief Executive Officers of frontline stock brokering companies hailed the Securities and Exchange Commission (SEC) for arranging to launch derivatives in the local market, claiming that it was a very positive move in the right direction.

This is a new development which will add to the portfolio which has hitherto been only an equities market, they said. Chairman of the Colombo Stockbrokers Association and Ceylinco Stockbrokers Director/ General Manager/CEO Sriyan Gurusinghe said this was indeed a decisive step in the Sri Lankan capital market development where a totally new product was being introduced.

“We were equity brokers all this time and it is indeed heartening to move into a new product in the market which will also add value to the market,” he said.

The SEC has briefed CSBA had been briefed about the Central Clearing Corporation and brokers were studying it and there is a positive possibility of attracting a large number of foreign funds into Sri Lanka with these developments, he added.

Asia Capital CEO Asanga Seneviratne said this was a good move which was long overdue and which should have been introduced 10 years ago. He said that another market instrument such as short selling should also be introduced.

The addition of new instruments will also enable to make investors take stock of Colombo as a financial hub and the positive / negative aspects of the Colombo market.

DFCC Stockbrokers CEO, Ray Abeywardena said this was a long felt need to diversify the number of instruments available in the market which will give the much needed confidence among foreign investors and based on its success, this should be a stepping stone for including other instruments such as hedging.