As inflation and interest rates drop:
Unit Trust stable and secure
Ceylon Asset Management, Managing Director, Dulindra Fernando said
the Unit Trust industry is stable and secure for investors as inflation
and interest rates decreased with the national economy recording a
With the dawn of peace, the Unit Trust industry growth has increased
The mass market has realized the potential of the stock market since
the Unit Trust is one of the safest financial instruments where people
could invest in while getting a higher return on their investments.
economic growth within three years
* Sri Lanka’s stock market has shown the best performance
* The future of Unit Trust industry very positive
With the economic developments taking place in the country the former
volatile situation in the financial sector has ceased and at present
there is a positive impact that Sri Lanka will experience rapid economic
growth within three years, he said.
He said the Colombo Stock Exchange (CSE) has modified its laws and
regulations to list Unit Trusts managing companies in the CSE.
The companies, which wish to list in the CSE and the companies, which
are already listed in the CSE, will enjoy profits as investor confidence
has improved. Tourism, banking, mobile phones and the construction
sector will record a rapid growth in the near future.
When Unit Trusts were first introduced to Sri Lanka in 1992 the
prevailing war situation impeded the growth of the financial sector and
we were unable to promote Unit Trust Funds among local and foreign
China and India also launched Unit Trusts at the same time when Sri
Lanka introduced Unit Trusts and they have made speedy advances. Since
peace and stability has returned to the country we too will make headway
in the coming year, he said.
Creating awareness among people is very important since people have
lost confidence with fake financial institutions.
The Securities Exchange Commission (SEC) will introduce specially
designed Unit Trusts for the rural community next year since communities
in remote areas have reposed confidence in Unit Trusts as a secure
alternative financial instrument, he said.
At present foreign investor participation has been limited, but we
hope that in first few months of 2010 there will be more foreign
participation in the Unit Trust industry.
The future of the industry is very positive. The number of rural and
foreign investors will increase further while getting higher returns on
National Asset Management Limited (NAMAL), CEO, S. Jeyavarman said
the Unit Trusts are an alternative financial instrument with less risk
and that they look forward to more investment opportunities and
investors to popularize it among the public.
Most people have not understood the concept of the Unit Trust due to
lack of advice, but compared to the previous years investors have shown
a good response.
With the reduction of interest rates we hope to attract more foreign
investors to invest in Unit Trusts, as the participation of foreign
investors has been limited.
He said the quality, services and standards of the Unit Trusts has to
be developed further. It is good to have safe alternative financial
instruments and to expand the industry increased awareness programs are
The public has recognized the potential in the Unit Trust industry
and this will be an excellent gateway for companies who wish to list on
the CSE to raise capital.