Amba introduces new high-end capital market training to professionals

By Cheranka Mendis

Amba Research on Friday introduced an Investment Analysis Training program for graduates and accounting professionals who are interested in advancing their knowledge on capital markets.

Set to start the first batch end July, the program has been endorsed by Securities and Exchange Commission of Sri Lanka (SEC) and accredited from Charted Accountants of Sri Lanka (CA Sri Lanka), Chartered Institute of Management Accountants (CIMA) and Association of Charted Certified Accountants (ACCA).

Targeted at budding capital markets practitioners such as final-year graduates and professional accountants seeking employment in the capital markets industry, the program has been designed for participants to experience a real-life investment analysis cycle: analysing the competitive dynamics of a given industry, building detailed earnings models that capture a high level of revenue/cost driver detail, and establishing a defensible valuation range using multiple methods.

Noting the importance of augmenting financial literacy in the capital market, and important component in the development drive of the country, SEC Chairman Dr. Nalaka Godahewa noted that the infrastructure development led by the Government alone is not sufficient for the economic growth of the country.

Pointing out Sri Lanka’s status in the HSBC Global Research report launched in February which acknowledged the focus on infrastructure of Sri Lankan Government as being ahead of other counterparts in the region, and on par with China and Malaysia, Godahewa noted that in developed country economies are driven by the corporate sector.

“While Government is building the foundation by establishing the infrastructure ,the next thing is that corporates and businesses must take over – large, medium, and small scale businesses must come up. For businesses to expand and grow, you need capital.”

Currently, Sri Lanka’s capital market revolves primarily on equity which holds 98% of the market, while only 2% is debt. The two together is only US$ 20 billion.

“Compared to a US$ 60 billion GDP you can say it’s almost 30% but comparing it with counterparts of the region – Thailand is US$ 450 billion plus capital market, Malaysia is US$ 470 billion, India US$ 1.2 trillion, Japan US$ 3 trillion. No country is less than US$ 400 billion in this region except Sri Lanka. Sri Lanka is the smallest tiny capital market in the region,” he commented.

The reasons behind the low capital market are war and related problems, he said noting that the economy was stagnant during the war period, Government was a heavy borrower incurring high interest rates, people didn’t play much in the stock market, no active secondary market, etc.

On increasing awareness about capital market and related fields, he said: “Capital market is a sophisticated market. If you want to work in the primary or secondary market you have to have a good financial literacy.”

He noted that the SEC together with the industry has come up with a ten point plan which includes making a greater portion of the population financially literate. “We are looking at different levels of education – those working in the industry, investing in this, those who wants to know, students who wants to be future employees. We have to approach this in different ways and are working with different institutes to improve that. Your (Amba) contribution of the program primarily targeting university students gives them a flavour of the capital market opportunities – this is a huge contribution.”

Speaking about the program, Amba Research Director and Sri Lanka Country Head Chanakya Dissanayake mentioned that it was the first time Amba is taking on the responsibility to train in an undergraduate level through a scalable platform. The program aims to create an annual output of some 150 trained professionals towards the capital market jobs of Sri Lanka.

“The program we have developed is in par with international standards in investment analysis. It will be covered on a very hands-on environment, developing detailed financial forecast models, conducting industrial attractiveness assessments and conducting valuations from multiple perspectives,” Dissanayake said.

“We believe that this program coupled with Amba’s ability to provide internship to a significant number of people graduating from the program each year will make the skill set complete for graduates to enter the capital market.”

Applications which are likely to be called next month will be open to final-year undergraduates at leading universities and final-stage students of professional accounting institutes such as CA Sri Lanka, ACCA and CIMA.

Participants of the program will be graded by a qualified panel which will mark seven assignments (70% of the total score) while the balance 30% will be determined based on an automated multiple-choice test. Successful candidates will receive an Amba-validated certificate with grading of distinction, merit or pass. The course duration is six weeks with 54 lecture hours. Amba will also offer internship to 30-40 high performers in the program.