Q: How do you see Colombo’s role as an international financial centre?
A: Colombo has many positives. One is that we have a very good legal system, and even in very bad times we were developing human capital. Now we are developing even more human capital. We have one of the largest collections of [Chartered Institute of Management Accountants]-qualified professionals. And there is a reverse migration happening. There are people who went away, and they are gaining confidence that the country will have a future.
Business services are developing very fast in Sri Lanka, because it’s a growing country, with 7% to 8% growth. These are very important elements for starting the financial centre concept. The economy is growing, and the other sectors are growing, especially the six hubs that are being promoted [maritime, commercial, knowledge, aviation, energy and tourism]. All of these things will require a vibrant economic, banking and finance sector, and that is happening.
Q: What will be some of your top priorities when you take over as chairman?
A: A vibrant capital market is a must for Sri Lanka. A McKinsey study has stated that we need about $70bn to $80bn in capital market operations in the next 10 years. We had been eighth in the world when it comes to scripless trading – we were ahead of London, ahead of India. The problem was that we went through a war, and certain areas were affected.
So at the Colombo Stock Exchange, I would very much like to have an institutional building. We have to make it a vibrant, different institution with a lot of human capital investment. And sectors such as stock brokerage will have to be developed – training, once again, is important. And bringing enough capital shows what we are doing – we have to encourage people to go out and bring in capital. So that’s the three aspects that I will look into.
Q: What kind of growth are you seeing in terms of numbers and volumes?
A: In 2011, the market went through a correction. So the volumes came down at that point. An unfortunate thing happened in Sri Lanka: at a time when the world economy was doing very well, when other countries were growing, we were [experiencing a civil] war. And when the war was over in 2009, that was the time the world was going through another war, an economic war.
I think now the phases are coinciding. The world economy is recovering and Sri Lanka is ready for investments and has stability, both economic and political. That’s where the country will thrive, and that’s where the stock exchange will take off. And new initial public offerings and debt instruments are very important, and that is taking off. I think overall there will be more growth in the capital markets in Sri Lanka.
Q: Which exchanges do you see as your main competitors?
A: I don’t think regionally we have that much competition. Of course, India is big, very big, and is ahead of us. In the SAARC [the South Asian Association for Regional Co-operation] region there’s hardly any direct competition to us. But we have to place ourselves technologically and human capital-wise ahead of others.
Q: How do you avoid being overshadowed by India, given the sheer scale of the market there?
A: That is what is a very interesting aspect. A lot of Indian companies that came to Sri Lanka, big companies, didn’t take off. The reason is that the Indian market… is what they are used to. The Sri Lankan market is completely different. So in that way I think we can play a niche role to India. If we were directly trying to compete with India in size, all businesses would fail, because that’s too big a market. But if you play a niche efficient role to India, we can have a big role in the Indian market as well.