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Monday, January 24, 2011

CSE's branches including Jaffna record impressive performances

By Athraja De Silva

Broadening the investor base as a main objective of the Colombo Stock Exchange (CSE), the performance of the 5 branches of the CSE has been exceptionally good during 2010 as the branches saw an increase in the average daily turnover in 2010 compared to 2009 with Matara at 438%, Kandy 501%, Kurunegala 269% and Negombo 624%. The newly introduced branch in Jaffna has also shown a good start with an average daily turnover of Rs. 1.39 million since its establishment. 'The performance of the Jaffna branch has been very encouraging,' said Malik Cader, Director General of the SEC.

The CSE recorded a turnover of Rs. 2,396 million for the year 2010. A notable achievement was the All Share Price Index (ASPI) of the CSE being named the second best performing Stock Index for the year 2010, according to Bloomberg news. In terms of broadening the investor base the CSE has already ventured into four provinces with development projects underway in the North and East. The Northern and Eastern community is said to be very interested in the latest developments of the stock markets and investing in it. Areas such as Batticaloa, Ampara and Palamunei are yet to be tapped . However, even though 554,000 securities accounts have been opened with the CDS as at December, 2010, only 13% have traded at least once a year.

Approximately 7,000 account holders trade on a daily basis. 'Though securities accounts in the CDS are opened they tend to remain dormant', said Cader.

He further stated that this was due to limitations in the capacity to cater to the account holders. Hence the servicing of more investors would be ideal to change these statistics.

Providing internet trading facilities is an option being pursued to improve services to the investors. Improvement in investor education is also hoped to be achieved by means of a Media Campaign including one hour live TV discussions at least twice a week followed by Road Shows where people can be seen directly interacting with CSE management.

The SEC further encourages small scale investors to start their investment through the Unit Trust industry, of which the marketing plan has been suggested above. This is due to it being less risky for the less sophisticated small scale investors than investing in the market directly.

source - www.dailymirror.lk