By Sanath Nanayakkare
Single Family Offices in Sri Lanka that manage their own financial affairs and funds have more wealth than the country’s Equity Funds, The Island Financial Review learnt last week at the Sri Lanka Investment Fund and Asset Management Forum organized by Fitch Ratings at the Taj Samudra.
Murtaza Jafferjee, Managing Director JB Securities explaining this at the forum said, "Equity Funds control only around Rs 13 billion in assets relative to the free float of the market which is around Rs 1,000 billion. Many retail investors are risk averse. They don’t want a potential short term capital loss so they seek safer options. Therefore, the money market Funds have to do a better job of promoting the advantages of equity-investing over a long period of time".
Speaking further he said, "Most of the savings in this country are in fixed deposits and in land. Due to lack of financial literacy people have not ventured into other options that have the potential to bring higher returns. The potential asset classes are equity, fixed income and real estate. Most of the savings in this country are in fixed deposits and in land. There are other options that have higher returns, but due to lack of financial literacy people have not ventured into them. My advice is for anyone who ventures into more risky asset classes like equity and bonds to FIRST invest through a unit trust product, and once they have familiarized themselves with the asset class they could go onto self-directed investing".
Commenting on the direction the SL money market should take, Jafferjee said, The Sri Lankan money market fund has developed significantly in the last few years, but it has still not been broad based. Distribution is a challenge due to lack of reach due to an absence of a branch network, insufficient adoption of digital technology and the lack of awareness amongst investors".
www.island.lk
Single Family Offices in Sri Lanka that manage their own financial affairs and funds have more wealth than the country’s Equity Funds, The Island Financial Review learnt last week at the Sri Lanka Investment Fund and Asset Management Forum organized by Fitch Ratings at the Taj Samudra.
Murtaza Jafferjee, Managing Director JB Securities explaining this at the forum said, "Equity Funds control only around Rs 13 billion in assets relative to the free float of the market which is around Rs 1,000 billion. Many retail investors are risk averse. They don’t want a potential short term capital loss so they seek safer options. Therefore, the money market Funds have to do a better job of promoting the advantages of equity-investing over a long period of time".
Speaking further he said, "Most of the savings in this country are in fixed deposits and in land. Due to lack of financial literacy people have not ventured into other options that have the potential to bring higher returns. The potential asset classes are equity, fixed income and real estate. Most of the savings in this country are in fixed deposits and in land. There are other options that have higher returns, but due to lack of financial literacy people have not ventured into them. My advice is for anyone who ventures into more risky asset classes like equity and bonds to FIRST invest through a unit trust product, and once they have familiarized themselves with the asset class they could go onto self-directed investing".
Commenting on the direction the SL money market should take, Jafferjee said, The Sri Lankan money market fund has developed significantly in the last few years, but it has still not been broad based. Distribution is a challenge due to lack of reach due to an absence of a branch network, insufficient adoption of digital technology and the lack of awareness amongst investors".
www.island.lk
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