Business

Singapore Forum well received and timely, says SEC, CSE

– Rs. 82.5 million net foreign inflows since Easter

The Securities and Exchange Commission (SEC) and the Colombo Stock Exchange (CSE) termed the “Invest Sri Lanka Forum” held in Singapore last week timely, even though it was planned prior to the Easter attacks, and well received, with encouraging participation and interest.

The forum, which targeted portfolio and direct investors in Singapore, attracted over 70 participants, who were offered an assessment of the investment climate and expectations for the short to medium term, considering the context of the Easter Sunday attacks that took place on 21 April 2019.

Investors also attended a number of one-to-one and group meetings with Sri Lankan listed companies that travelled to Singapore for the Invest Sri Lanka Initiative, which included chairmen, chief executives, and senior management representatives of John Keells Holdings PLC, Commercial Bank of Ceylon PLC, Dialog Axiata PLC, Hemas Holdings PLC, Sampath Bank PLC, People’s Leasing and Finance PLC, National Development Bank PLC, Softlogic Holdings PLC, Softlogic Life Insurance PLC, and Sunshine Holdings PLC. The event was also supported by the Sri Lankan stockbroking community and respective partners based in Singapore, with eight Sri Lankan firms present at the event.
SEC Chairman Ranel T. Wijesinha said that the forum provided Sri Lanka an opportunity to tell its story to foreign investors.

“I believe the forum was well timed, well represented, and all of those who spoke had substance and it was received very well. The feel is very positive. We have a story to tell. At this moment, our capital market is perhaps one of the most attractive capital markets, not just in the region but even beyond; market multiples and price earnings ratios ranging from 8-9%, and a well governed, regulated, and supervised banking sector where the price earnings ratios are around 5-6%.”

As a chartered accountant himself, Wijesinha said that the fact that Sri Lanka follows international financial reporting standards ensures that the quality of earnings is audited often by no less than the big four accounting firms, namely KPMG, Ernst & Young (EY), Deloitte, and PricewaterhouseCoopers (PwC).

He also termed the Easter attacks’ impact a temporary setback not unlike any other international terrorism related incident.

“We are deeply committed at the government, institution, and capital market ecosystem levels to maintain the momentum of our journey, and the Singapore Investor Forum is just one of the many initiatives we have planned out.”

Interestingly, foreign investors have not run away from the CSE, with the market seeing a Rs. 82.5 million net foreign inflow since Easter up to the market close on Friday (24).

CSE CEO Rajeeva Bandaranaike said that he fully realised the value of holding the event as planned in spite of the current situation once he arrived at the event.
“All who confirmed turned up. All the institutional investors engaged with the listed companies. We also had a forum in the morning and even that forum had over 70 participants and was almost a full house. So the response was quite good considering the circumstances and it gave us an opportunity to reassure investors to stay invested. Our objective was also to retain those investors. This was scheduled well before the Easter incidents, but we had a decision to make pertaining to whether we should go ahead or not, and we decided on the latter as it would not look good if we postponed. We realised, once we went there, exactly how important it was that we did, because it gave us an opportunity to explain the circumstances to investors who had already invested in Sri Lanka.”

He added that the reason Singapore was chosen for this forum was that a major portion of the investments into the CSE are channelled through Singapore.

“We have carried out investor forums in Singapore several times over the past few years. Some of the investors from UK, the US, and Europe have their allocations done through fund managers based in Singapore. We will continue to promote the market among both local and foreign investors,” he said, but refused to specify future plans with regards to forums.

The CSE and SEC has previously organised “Invest Sri Lanka” forums among investors based in key financial centres around the world, such as UK, the US, Singapore, Australia, New Zealand, UAE, India, Switzerland, and Hong Kong. This was the fourth Invest Sri Lanka Forum conducted in Singapore.

Wijesinha said that Sri Lanka’s capital market is “fighting below its weight class” and that Sri Lanka is not a “new kid on the block”.

“We have a corporate sector and business community in Sri Lanka which is second to none anywhere in the world. When we initiated the need for corporate governance and subscribing to international accounting standards, every corporate, whether led by qualified professionals or charismatic hardened business leaders, subscribed to those standards.

“We are also not a new kid on the block. Our accounting auditing standards and bank supervision were far superior to several ASEAN countries and that is why they suffered from the East Asian financial crisis in 1998, 10 years before the global financial crisis, and we did not. We have progressed beyond where our business community is an old boys’ network to one where we are following international standards in accounting, auditing, and corporate governance.”

He added that the SEC had a history of over 30 years of regulating PLCs, and the PLCs themselves had been demonstrating resilience, and all that combined with the many other initiatives keep Sri Lanka attractive to foreign investors.

State Minister of Finance Eran Wickramaratne, Central Bank Governor Dr. Indrajit Coomaraswamy, SEC Chairman Ranel T. Wijesinha, CSE Chairman Ray Abeywardena, and LYNEAR Wealth Management Managing Director Dr. Naveen Gunawardane spoke at the event while CSE CEO Rajeeva Bandaranaike and SEC Director General Vajira Wijegunawardane joined in as panellists during the discussion segment. The panel discussion was moderated by Singapore Sri Lanka Business Association Senior Advisory Board Member and past President Manjiv Dodanwela.