CFA Sri Lanka: Shaping the investment industry with the launch of capital market awards
Tuesday, 23 July 2013 00:47
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CFA Sri Lanka has announced the inauguration of the first-ever capital market awards night in Sri Lanka. The event will be coupled with the forecast dinner, a very popular event which the society is reintroducing into its event calendar. The society will be seeking to recognise firms and practitioners that have contributed towards achievement of professional standards of practice in the capital markets.
The audience will have the benefit of listening to a prognosis of the economy and financial markets by a panel of experts The awards segment will see CFA Sri Lanka recognising achievements in two key areas vital for the efficient functioning of capital markets; equity research and investor relations.
CFA Sri Lanka is the local chapter of the CFA Institute based in Charlottesville in the US. The institute is a global association of more than 116,000 members in 137 countries which champions the cause of professional excellence and ethical behaviour in financial markets. It administers the award of the CFA Charter, widely recognised as the gold standard in the investment profession worldwide.
CFA Sri Lanka President Sheyantha Abeykoon, CFA, shared some thoughts about the upcoming event and the motivation for organising it in an interview.
Following are excerpts:
Q: CFA Sri Lanka is re-launching the forecast dinner after a hiatus of five years and is also adding an exciting new segment – an awards night. Can you tell us about your motivations in launching this event?
A: The forecast dinner was an event that had been very well received by the local investment community in its previous renditions, so we always had an intention to bring it back. However we didn’t want it to be a mere re-introduction of the old format, but were continuously deliberating ways in which we could create more impact and align it with the overall mission of the Institute; to lead the investment profession by promoting the highest standards of ethics, education, and professional excellence.
The introduction of the awards segment we felt helps us achieve this by recognising and lauding efforts of both practitioners and firms who have contributed towards the development of standards of professionalism and integrity in the markets.
Q: Why did you choose investor relations and equity research as your award categories?
A: High quality research we believe is pivotal for the efficient functioning of equity markets. Over the years the market has undergone various cycles which have been accentuated by domestic instabilities and the fortunes of market participants have also mirrored these gyrations. As a result, putting resources behind developing sound research teams has not always been top priority, of course there have been exceptions. However in the post war period we have seen many firms investing in building research capabilities, perhaps now having more visibility and confidence to invest over longer horizons. This is a behaviour we wanted to encourage. CFA Sri Lanka is the most prominent professional organisation in the country that has a body of knowledge highly focused around capital market activities.
We felt we should take the lead in encouraging more firms and analysts to produce high quality research and help them to benchmark against global best practices.
On investor relations, listed firms engaging in transparent and consistent investor relations practices is a vital part of the wider ecosystem necessary for markets to function efficiently. Truth be told, the overall standards over the years have been quite paltry, perhaps also because markets themselves were not a conducive means for raising capital for corporates. However we see this as both a necessary and complementary activity to fostering a strong research orientation in the markets. Hence we wanted to recognise firms that have made the effort to court the investing community and encourage others to do so.
Q: How did CFA Sri Lanka administer the selection of winners for the awards?
A: We wanted the final adjudications to be done by the most relevant constituent groups; the consumers of such services. Hence panel of judges for the best equity research report was comprised of members from the leading asset management firms and other institutional investors. For the investor relations the panel of judges consisted of the heads of research of a number of broking firms and fund managers. So we kept the process fairly independent. CFA Sri Lanka’s contribution to the process was really providing the judging panel with access to our domain knowledge on the subject matter. For instance in equity research we have developed fairly comprehensive methodologies and frameworks for equity research report writing. These frameworks were shared but the final determination of criteria was left to the judges. Similarly our sister societies around the world have developed fairly robust metrics for judging the effectiveness of investor relations functions. These were also shared but the final approach was left to the discretion of the panel of judges.
Q: Do you plan to make this a regular event and if so would you keep the formats the same?
A: Yes that is certainly our intent. The forecast dinner is a regular event conducted by most CFA societies around the world and has a particular niche following of its own. The forecasting by the audience is of course done in lighter vein but the views of the guest speakers and panellist on market directions are always sought after. The awards segment would ideally be spun off as a separate event in the future with more award categories being introduced gradually. We are hopeful that it will become a signature event for both our society and the local financial services industry.
