New Target

Sri Lanka aims for emerging market status: regulator July 9, 2014 (LBO) - Sri Lanka wants to move beyond being a frontier market into emerging status where investor confidence is important, Securities and Exchange Commission chairman Nalaka Godahewa said."We like to see our market being upgraded from frontier market status to emerging market status at the earliest possible date," Godahewa told a forum organized to explain the role of independent directors.

"We like to see more companies identifying the capital market as a channel to raise funds to support their long term investment needs. We like to see our market growing in value and quality.

"We like to see ‘market cap to GDP ratio’ of at least 40 percent within the next 3-4 years.

"In order to achieve these objectives, the investor confidence in our capital market becomes a key factor."

He said independent directors could enhance corporate governance. Academic research in the US and UK had shown that companies with strong shareholder rights outperformed weaker ones by 10 to 12 percent.

"This is the obvious reason why investors prefer companies that are known for superior corporate governance practices," he said.

"Particularly at a time when we are seeking a greater engagement of foreign investors in our market, we need to be conscious of the need to promote corporate governance best practices amongst our listed companies.

"The companies should also understand that better corporate governance means better access to finance."

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