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By Ravi Ladduwahetty
President Mahinda Rajapaksa has assured the members of the Colombo Stock Brokers Association (CSBA) that all the demands that they had put forward to him, including the removal of the price band, would be met in the near future, and that steps would be taken to bring back the exchange to where it was last year.
For several weeks the market has been falling largely due to credit issues.
President Rajapaksa, the Economic Development Minister and Secretary to both the Ministries of Finance and Planning and Economic Development Dr P.B. Jayasundera were supportive of the requests that the CSBA made, Colombo Stock Brokers Association Chairman Sriyan Gurusinghe told The Island Financial Review last night.
Some of the demands made by the brokers were: Allow the brokers credit three times the value of the net capital, the removal of the price band, increase the commercial bank lending on listed equity collateral from the current 5 percent to 7.5 percent and concessions for foreign broking companies to extend credit.
The association had requested the meeting to keep the President informed of what was happening in the capital market. "We also needed to keep him informed of what could happen in both the short and the medium term as well," Gurusinghe said.
The brokers had also told the President that there was no tangible reason for the market to decline in the wake of corporate earnings and profits rising by as much as 40 percent and that the inherent risks of lending capital was not there now.
They had also said that there was a need to review the Exchange Control Act in the context of some foreign stock brokers were not permitted to have margin trading in Sri Lanka. They had also touched upon the current rules for commercial banks lending to the Sri Lankan equities market.
" The President gave us a patient hearing and said that arrangements would be made for the market to be where it was prior to July 10, last year," Gurusinghe said.
http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=40013
