Sri Lanka should strengthen its capital market to mobilise long-term investment and support sustained economic growth of 7% to 9%, Securities and Exchange Commission (SEC) Chairman Senior Professor Hareendra Dissabandara said.
Addressing the Capital Market Industry Forum on October 27, he said the country must move beyond economic stabilisation and recovery towards building productive capacity, attracting investment, creating employment and improving living standards.
Although Sri Lanka’s economic growth of around 4% to 5% was encouraging following the recent economic crisis, it was insufficient to meet the country’s long-term development aspirations, he said.
“Where will Sri Lanka find the long-term capital required to finance this higher level of investment?” he asked, emphasising that the country could not sustainably achieve higher growth by relying excessively on Government borrowing or expecting the banking sector to meet all financing requirements.
Prof. Dissabandara said the capital market could play a greater role in financing productive enterprises through equity and corporate debt markets, while collective investment schemes could broaden investment opportunities for smaller savers.
He urged the Government to recognise capital market development as a key component of the forthcoming National Budget, calling for measures to encourage new listings, introduce appropriate financial instruments and attract domestic and foreign institutional investors.
The SEC’s Capital Market Strategy for 2025–2035, built around 12 key projects under the theme “12 Pillars — One Vision for a Resilient Market”, aims to strengthen market infrastructure, expand investment products, improve investor education and facilitate digital transformation. The initiatives also include developing the corporate debt market, demutualising the Colombo Stock Exchange, introducing a Central Counterparty mechanism and establishing a multi-asset-class derivatives exchange.
Commenting on recent market volatility, Prof. Dissabandara cautioned investors against panic-driven decisions, noting that geopolitical tensions, energy prices, foreign portfolio adjustments and liquidity conditions had influenced market performance.
He also stressed that professional ethics, transparency and investor protection were essential to sustaining market confidence.
“The capital market must play its rightful role” in supporting enterprises, mobilising savings and contributing to Sri Lanka’s sustainable economic growth, he said.
Source: Daily News
