At the moment we are in a frontier market. Public float or free float is our major problem. Only John Keells Holdings and Commercial Bank met those Morgan Stanley Emerging Markets Index liquidity requirements. We need more such type listed companies to tap those funds. Reaching that Morgan Stanley Emerging Markets status is our long term goal, brokers told Karunanayake.
President Colombo Stock Brokers Association (CSBA), Dihan Dedigama, speaking to the Ceylon FT yesterday , after the meeting with Karunanayake, said: " 'MSCI Emerging Markets Index' is created by Morgan Stanley Capital International (MSCI). This is designed to measure equity market performance in global emerging markets.
The MSCI Emerging Markets Index captures large and midcap representation across 23 Emerging Markets (EM) countries. With 835 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.
EM include: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Russia, Qatar, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
If Sri Lanka can reach 'MSCI Emerging Markets Index' status we can tap all those MSCI investments in our market, Dedigama said.
"It is a long term process and we have to fulfil certain criteria to fulfil that target". He said.
Brokers also requested the minister to increase the negotiated deal broker commission and also possibilities of more government entities listing. The negotiated deal broker commission is 0.2% at the moment.
Earlier, the negotiated deal commission was 0.9%, but, later the Regulator ( SEC) reduce it to 0.2%.
There were times we had
Rs 3-4 Billion rupees worth of negotiated deals, but now that volume is well below that amount. So, we requested the government to re-think our commission, another stockbroker said on the condition of anonymity.
The minister also rejected the further government entities listing, because privatization was not the government policy, he said.
The minister yesterday also appointed two treasury officials to address the grievances of stockbrokers.
Courtesy: Ceylon Financial Times 21 May 2015