Sri Lanka’s stock market performance makes way for next level of development
Sri Lanka’s State Minister of Finance, Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal has reportedly said that the performance of the Colombo Stock Exchange (CSE) has proven the country’s depth and together with other policies of the government of Sri Lanka has set the stage for the country to aspire to the next level of development.
The State Minister has made this observation at the 41st National Conference of Chartered Accountants.
Speaking at the event Cabraal has argued that the CSE through its recent impressive run has proved that the assumption of Sri Lanka’s share market having little depth is a “fallacy”.
“Of the stock market I don’t need to tell you much. We do not need to wait for foreigners, Sri Lanka has enough depth. When I met with stakeholders a while ago I pointed out to them that Sri Lanka has Rs. 10 trillion in bank deposits and we should make use of that. Sri Lanka has typically been described as a thin market, but that fallacy has now been completely crushed,” he has been quoted as saying.
The State Minister has noted that foreign investors will return to the market at some point in the future but it was up to Sri Lankan investors to use this momentum to move the country towards the next level of development.
“I like the butterfly theory. The fluttering of a butterfly’s wings may seem like the gentlest of things but over time the flapping of the wings can lead to the momentum that ultimately becomes a storm. In a more benign fashion we can compare this to the steps we are taking today. The way we are educating our children or moving towards development or doing business. But all these things will cumulatively take us forward.”
The Minister has further emphasised that in this regard the Government has already started laying the groundwork by investing in infrastructure, and working to set in place the right regulatory and policy environment to attract investors and create new opportunities for Sri Lankans.
According to Cabraal, the Government was confident Sri Lanka could reach a US$ 150 billion economy, and was dedicated to establishing the foundation to reach that goal in the next four years.
“We have to aim for the US$ 150 billion economy. We need to have a massive amount of investment to come in, and over the next few years we are developing the rules, the platforms and the governance systems for investors to see Sri Lanka as a viable destination. We are developing the infrastructure for people to do business better. With all that we would not be abnormal anymore. We would be on par with developed countries with US$ 7,000 per capita income and the chance for people to live better lives.”
OSL take:
The positive movements in Sri Lanka’s stock market is indicative of the confidence investors have on the country’s economy. Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is already showing signs of a quick rebound following the impact of the global Covid 19 pandemic. Also, Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country are in the process of making the island a business hub in the South Asian region. Foreign businesses/investors could therefore explore business/investment opportunities in Sri Lanka.
| Article Code : | VBS/AT/20210121/Z_1 |