Stockbrokers say ‘No Problems Sir!’

17 September 2012 02:51 am - 1 - {{hitsCtrl.values.hits}}

A A A

The meeting between SEC officials and stock brokers in progress (Picture courtesy SEC)

The appointment of Dr.Nalaka Godahewa as the Securities and Exchange Commission Chairman seems to have been able to cast out all the grievances the stockbrokers have had, even perhaps to the utter surprise of Godahewa himself.

During the meeting heads of the stock broking firms—inclusive of those who are not members of the Colombo Stock Brokers Association (CSBA)—had with the new SEC Chairman and the senior management last Friday, the brokers stated that there were no major concerns that they should bring into the regulator’s notice.

They also told the SEC that they were really upbeat and happy about the market performance during the last couple of weeks.

This was quite contrary to the past behaviour of the CSBA who met the President Mahinda Rajapaksa twice to air their grievances about the country’s capital market. ‘More credit’ and relaxing of rules were their main demands.

In fact, the issues they pointed out during the meeting were quite profound as opposed to their demands and suggestions to the SEC under Indrani Sugathadasa and Tilak Karunaratne and to President Rajapaksa in two occasions.

Incidentally A powerful investor termed most of the demands and suggestions of the broking community as ‘childish and worthless’ in a recent media conference.

According to Tushara Jayaratne, Assistant Director External Relations and Market Development at SEC, who was authorized to talk to the media in this reguard, the brokers during the meeting requested the SEC to consider re-evaluating the equation for calculating the net capital.

They also requested the SEC to allow brokers to trade within the normal parameters of the market.

In the aftermath of the infamous NSB-TFC deal, the SEC last May said that market intermediaries would not be allowed to engage in trade below six months from the purchase date (except in IPOs) and crossings would be limited to 20 percent above market price.

Jayaratne also said that brokers urged the SEC to have a credible solution to the settlement risk in the Colombo bourse.

Both the SEC and the Colombo Stock Exchange (CSE) have said that a Central Counter Party (CCP) system would be put in place shortly to mitigate settlement risks.

The brokers have also insisted the need for market development programmes and investor education.

“They emphasized the need to conduct market development programmes and to have a consultative process. They also wanted to these programmes to be held with the participation of all three parties, the SEC, CSE and them,” Jayaratne said.

He also said that the brokers noted the need for a national task force to map a long term capital market development master plan. From time-to-time, both CSE and SEC have come up with capital market plans, spanning from 5 to 10 years, though they had not been implemented properly.

The brokers also requested the SEC to grant them monetary concessions to improve their infrastructure which included back office operations.

In response, Dr. Godahewa had told them to submit their suggestions in writing and stressed that SEC will assist and safeguard all market stakeholder interests.

He also urged the brokers to be self-disciplined in conducting their duties and in reply the brokers told the SEC that they wanted to explore the possibility of surveillance at their level. They further agreed to improve their code of conduct.

Godahewa also told the brokers that SEC will carry out its businesses according to the mandate given by the SEC Act, and investigations will continue as usual, but with specific time frames.

Sri Lanka’s capital market ran into controversy with the resignation of two SEC Chairmen within less than one year. Indrani Sugathadasa, who was the wife of President’s Secretary, said her resignation was carried out to ‘uphold principles’ while her successor, Tilak Karunaratne told media he was pressurized to step down by the powerful investors who had links to higher authorities, as he ordered the re-commencement of certain investigations that were put on hold.

Following the resignation of Karunaratne, the retailers and high net worth investors were seen returning to the market to join foreign investors who were already present and had been net buyers.

Since the appointment of Dr.Godahewa on August 24, the main All Share Price Index has risen 18.2 percent resulting in Bloomberg ranking Colombo bourse as third best performing market.

However, Dr.Godahewa’s appointment to the SEC did not bring any revision to SEC rules and regulations or there hadn’t been any positive change in the macro economic outlook of the country.

In fact Sri Lankan economy is seen slowing down amidst shrinking export income and tight monetary policy actions implemented by the Central Bank. In a recent interview, Treasury Secretary Dr.P.B. Jayasundara told Reuters that Sri Lankan economy will grow between 6.7 to 7.2 percent in 2012. The original development target set by the central Bank for 2012 was 8 percent.

Meanwhile, to independent analysts, Dr.Godahewa has a strong case of ‘conflict of interest’ against him in carrying out his duties as the SEC Chairman, being the Chairman of a listed firm and closely associated with powerful investors.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 1

Gamarala Monday, 17 September 2012 05:46 PM

God bless all the Lankan.

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Stockbrokers say ‘No Problems Sir!’

Comments - 1

Add comment

RECOMMENDED

‘Spike in blast fishing’ poses renewed threats to Sri Lanka’s marine ecosystems

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Most Viewed in News

Train fails to halt, crashes onto Colombo Fort platform

Racing event tragedy leaves seven dead including eight-year-old child

Street food vendor arrested for verbally harassing foreigner

Ranil Wickremesinghe caravan moves on despite barking dogs

Sri Lankan among NASA’s new crew for next simulated Mars journey

SL on alert on possible genocide allegations by Canada

MIRROR CRICKET

Is Chamari Athapaththu Sri Lanka’s greatest cricketer ever?

Athapaththu back atop ICC Women’s ODI Batting Rankings

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

TODAY'S HEADLINES

SL took minimal steps to punish officials who committed human rights abuses: US report

Iranian President’s visit Sri Lanka withstands western pressure

25 tons of solid waste disposed along Sri Pada route

Temperature rises to ‘Caution’ level

Sri Lanka secures third spot in South Asian Kurash Championship 2024

Athapaththu back atop ICC Women’s ODI Batting Rankings

Army forms committee to probe Diyatalawa Fox Hill Supercross accident

Indian cricket manager indicted for Legend Cricket League match-fixing allegations