Pension, ETF funds accessible, but remains inoperative - Fitch

Sri Lanka capacity to enter into the regimen of stable and sustainable growth was good. Particularly transfer of knowledge in relation to the funds industry was considered within the vortex of developing markets, CEO & Country Head, Fitch Ratings Lanka Ltd., Maninda Wickramasinghe said.

"Although Sri Lanka's potential was described to be good, speakers at the forum and panel discussion hinged on the aspect that there was much to be desired from implication of financial disciplines and management of substantial funds left dormant, yet available for development," Sri Lanka Investment Fund and Asset Management Forum recently.

Wickramasinghe said private equity funds subservient to degrees of independence could be better positioned for growth.

Hypothetical aspects of the Forum were that funds management within commercial perspectives could be better utilized for progress.

Managing Director, JB, Murtaza Jafferjee, said, "managing assets should be a clear process of knowing what to do, with the funds available yet, unused. He said pension funds amount to approximately Rs. 1.9 billion and ETF funds were Rs. 1.9 billion. Although this substantial funds base was accessible, it remained inoperative."

"Savings and bank interest were low. Generally people preferred to sustain these low interest rates rather than risk such savings in for instance the share markets. What happens was that the preferred investment was gold or real estate," he noted.

Although China was not affected by the financial crisis of 2008, the Chinese economy is currently in lean times.

The US was now in a commanding position in comparative money markets with a 51 percent global share, comparatively, she said. “Sri Lanka’s share was miniscule. With assets described to be about 1 billon dollars , Sri Lanka’s position was 0.0001 percent”.

It was described as a “low yield environment”. However, growth potential of Sri Lanka was high subject to correct carefully assessed and implemented funds industry, she said.

Li also placed the Russian Ruble to be strong, and added Russia is in the global segment or stable money markets.

At the panel discussion the media disagreed with this view based on the factual position that the depreciated Russian Ruble caused ripples in the local tea market, because Russia was not able pay top rupee for the tea purchased. She did not dispute this view.

Taxes too were an aspect that emerged at the panel discussion. Here, too the view was that the question that taxes ‘would go’ did raise some disbelief.

Again the media pointed out that according to the Inland Revenue Department, only about 150,000 people were paying taxes, the others were not and urged fresh thinking if taxes were to be done away with.

(H.D.H)
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