26 October 2017 12:02 am
The Colombo Stock Exchange (CSE) has embarked on a countrywide project to identify and understand the number and scale of the potential new investors who are currently staying out of the market.
To this end, the CSE has called for request for proposals (RFPs) from the survey research agencies to conduct a public survey research on share investments in Sri Lanka.
“The CSE invites prospective service providers to submit a proposal, quotations and technical specifications for the conduct of a national survey of the adult population with disposable income in Sri Lanka aged 18 years and above,” the CSE said.
After a two-year bear run, Sri Lankan stocks are rallying this year albeit with lower institutional and retail investor participation, which may have baffled the CSE management as well as brokers.
Foreign investors, who have been the driving force behind the current market rally, had net bought equities over Rs.19.4 billion by this Tuesday.
During the 2010-2011 stock market rally, novice investors, who were drawn into the unprecedented bull run, ended up losing millions of rupees of their hard-earned savings as a few high-net-worth investors played pump and dumping of stocks at the expense of many who knew nothing of the market. But the investigations into these alleged market manipulations have been moving at snail pace and no one has so far been taken to task.
The envisaged survey will enable the CSE to approach the potential investors in a more targeted manner and convince them of the upside of investing in stocks.
“The purpose of this survey is to evaluate the understanding of the public on share investments and sentiments towards share investments and the CSE in particular as an institution. The survey will also identify the factors behind the lower level of participation in Sri Lanka. The survey will cover all the districts in Sri Lanka,” the CSE said.
Currently there are only 750,000 CDS accounts, which is low by any measure. Also the current investment mix between the foreign and local investments in equities stands at 25 percent to 75 percent.
Although a stock exchange is an important barometer of an economy, in Sri Lanka’s case, the stocks represent only a fraction of the economy as there are only 296 publicly listed companies in the market.
The CSE asked the respondents to this RFP to submit their proposals to Head of Research and New Products at the CSE or e-mail to ‘research@cse.lk’ on or before 1630 hours on November 21, 2017.