"A credible and transparent index would positively impact the market by providing visibility and better pricing and serve us well in attracting the foreign investor," Balendra said.
"A credible index also forms the foundation for exploring the previously unchartered territory of index linked products as well as cross exchange alliances."
He explained these were elements that would in the future enable the CSE to establish revenue-raising avenues in the context of its business model which was particularly relevant for a profit oriented setting.
Reviewing 2011, Balendra noted that the year had been a turbulent one for international markets with only a few equity markets recording positive gains.
In Sri Lanka, the All Share Price Index was down 8.5% while the Milanka plunged 25.9% although market capitalization just above Rs.2.2 trillion had not changed sharply from the previous year.
While the 2011 equity turnover remained over the Rs.5,000 million mark first reached in 2010, he said that domestic trading, up to 90% from 81% the previous year, had sustained turnover.
"We have prioritized the implementation of certain structural changes to attract portfolio investment flows as this skewed investor mix is not optimal for the long term development of the Exchange," he said.
Balendra’s review did not cover developments this year which has taken the All Share Price Index below the 5,000 point support level with many stockbrokers now confronted with a loss making situation.
CSE’s CEO, Ms. Surekha Sellahewa said that the market which had reached an all-time high of 7,811.8 points in February on the ASPI had closed the year at 6,074.4 points reflecting 8.5% loss year-on-year.
"Domestic participation sustained the turnover for the year at Rs.546.3 billion, where total turnover for the year reflected a drop of 4.2% from 2010," she said.
The CSE had earned a group net profit of Rs.593.1 million in 2011, down from Rs.855.7 million the previous year. There were 272 listed companies quoted by the exchange of which 265 had traded.
The number of CDS accounts had increased to 666,665 from 554,192, up 20% on account of the requirement that no share certificates are held by investors and all subscribers to initial public offers hold CDS accounts.