Saturday Nov 16, 2024
Saturday Nov 16, 2024
Monday, 16 September 2013 00:15 - - {{hitsCtrl.values.hits}}
He emphasised that bonds are ideal for large scale investments not capped by SBL, diversifies the funding base and increases stability of capital structure, mitigates interest rate risk through protected instruments (i.e. caps, floors, swaps), and is ideal for funding of long term projects. Further emphasis was also made as to why debt instruments need to be issued by corporates mainly for correcting mismatches on short term funding, deploying organisational strength for financing growth without institutional support and finally as a restructuring tool considering the cash flow of the business.
The concessions awarded in 2013 Budget from waiving off of withholding tax and interest income earned on listed debentures attracted large number of retail, high net worth and corporate investors and expected to attract more investors in future too, considering the interest rate scenario of the country nevertheless the size of the market being small. Economic volatility has made many investors to seek for cautious opportunities in debt markets. Therefore knowing the debt instruments and opportunities available will be important for an investor and even for the debt raisers.
As the interest on the program was high and many focused not only on local rating but also on international rating and how it could be done with currency exposure since it is a local debenture. An illustrative example was explained, simply considering the cross currency rates and the viability to medium sized corporates being less other than large corporates like banks and conglomerates.
Way forward in Sri Lanka, financial markets are growing, adding more complexity to the financial products offered to investors. Therefore, knowing about debt instruments is important for an investor as well as for a lender.
The program is aimed for Chief Executive Officers, Chief Financial Officers, Finance Managers, Compliance Officers, Risk Control Specialists, Investment Analysts, Financial Accountants, Management Accountants, staff of audit firms, financial advisory and consultancy firm staff, staff of listed companies, banks and insurance companies, Investment Bankers, Research Analysts, Investment Managers, Portfolio Managers and people with special interest in debt instruments.
Over 100 participants participated in the event and gained a knowledge on basics of debt instruments, associated terminologies and factors that affect the pricing and its benefits for issuers and benefits for investors by investing in these instruments, how to make an intelligent choice for investment recommendations. Further the seminar elaborated on how to get ratings from rating agencies for debt instruments and the processes involved.
A strong interactive panel discussion was finally held with participants and most showed interest on the tax incentive that is offered and how it will be continued, the focus of willingness and ability to pay a return by the corporates, etc. the panel comprised of industry specialists from the related area MBSL Deputy General Manager Corporate Advisory and Capital Markets A.M.A. Cader, Department of Inland Revenue Assessor –Secretariat and Tax Policy Thanuja Perera, Bank of Ceylon Senior Manager M.K. Mallawarachchi and MBSL Manager Portfolio/ Investment Hemendra Wijekoon.
