Wednesday, October 24, 2012

Capital market welcomes pre-Budget talks with Dr. PB as ‘very positive’

Capital market stakeholders yesterday welcomed the pre-Budget meeting with Finance Secretary Dr. P.B. Jayasundera and his team as ‘very positive,’ given the spirit of pragmatism and immediacy reflected.

 Almost all stakeholders who were associated with the mid-July forum with President and Finance Minister Mahinda Rajapaksa attended yesterday’s meeting under the aegis of the National Council for Economic Development (NCED). Dr. Jayasundera had indicated yesterday’s meeting was part of the follow-up process as well as consultation ahead of the 2013 Budget presentation by President Rajapaksa on 8 November in Parliament.

The Securities and Exchange Commission (SEC) led by Chairman Dr. Nalaka Godahewa, the Colombo Stock Exchange (CSE) led by Chairman Krishan Balendra, Colombo Stock Brokers Association (CSBA), the Unit Trust Association (UTA), and the Margin Providers Association (MPA) had submitted written proposals as well as explained the rationale for same.

 Heads of these organisations, commissioners, directors and senior officials/representatives attended yesterday’s meeting, whilst among investors present were Harry Jayawardena and Nimal Perera as well as K.C. Vignarajah.

 Sources said that support for the development of listed corporate debt market (which currently faces a 10% withholding tax), improving new listings – both from private and public sectors, attracting new funds/investors both foreign and local as well as market infrastructure development had been discussed.

 Measures to improve liquidity and free-float of listed shares, simplification of procedures for foreign portfolio investors, rationalisation of residual levies (stamp duty on transfers within margin trading accounts) as well as investor education and promotion had figured during the discussions, which lasted around two hours.

 Dr. Jayasundera had called on capital market stakeholders to prioritise the most immediate recommendations for consideration by the Government for the upcoming Budget, whilst other measures could be earmarked as medium and long term.

 He also assured capital market stakeholders that the Finance Ministry would continue with the regular dialogue to iron out issues and develop a dynamic, attractive, and inclusive capital market in the country.

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