63rd LBR LBO CEO Forum – “Reimagining Debt Capital Market to Unlock Opportunities & Sustain Growth” – 4th June 2015

63rd-lbr-lbo-ceo-forum-

Topic: Re-imagining Debt Capital Market to Unlock Opportunities & Sustain Growth in Sri Lanka
Date/Time: Thursday 4th June 2015 | 1800 - 2100 Hrs
Keynote Speakers: Ajith Fernando | Managing Director, CEO | Capital Alliance Kartik N | Director Debt Capital Markets, Asia Pacific | HSBC
Moderator: Maninda Wickramasinghe | Country Head Managing Director / CEO | Fitch Ratings Lanka
Panelists: Vajira Wijegunawardene | Director General | Securities and Exchange Commission Mano Tittawella | Executive Chairman and Managing Director | EAP Group Chamira Wijetilleke | Head of Corporate Banking | HSBC
Venue: Grand Ballroom 1, Colombo Hilton
Host: Lakshaman Bandaranayake | Founder, Publisher | Lanka Business Online [LBR LBO]
To Join the Discussion, Post your Comments/Questions Text: 071 294 7693 | Twitter: @lbolbr | Facebook: LBRLBO | Use Hashtag: #63rdlbrlboforum#lbrlbo, #lbrlboceoforum×
If you wish to request an invitation to attend LBR LBO CEO FORUM, kindly fill the LBR LBO Invitation Request Form×
UNLOCKING POTENTIAL OF DCM TO SUSTAIN LONG-TERM GROWTH Availability of long-term debt funding is essential for smooth execution of long-term corporate strategy of a firm. Insufficient funding levels could curtail a firm’s growth ambitions and in the most extreme case prove to be a significant threat for the continuity of the firm. Thus having a stable, accessible and well function debt capital market (DCM) has been proven to be a key driver of corporate growth. SLOW GROWTH IN DEBT CAPITAL MARKET IN SRI LANKA Traditionally the commercial banks have been the primary source of debt capital in Sri Lanka. Issuing of corporate bonds to general public through prospectus began only in 1996. Sri Lankan DCM has historically been thin and dominated by government bonds. The growth of private sector DCM has been slow than equity market. The domestic debt market in Sri Lanka is still at a nascent stage. It has been estimated that retained profits finance about 70 percent of private investment in Sri Lanka, with short-term borrowing financing a further 20 percent. Thus long-term debts fund only around 10% of private investments. In many parts of the world, particularly in the developed markets, corporate bonds have been a stable source of corporate funding and for economic growth. Empirical research has shown that in Sri Lanka mean long-term debt to equity ration is in the region of 25%, much lower than developed market. Similarly the total debt to equity ratio too is much lower. Of the total asset base of Sri Lankan corporates, less than 60% is financed by debt and less than 10% is financed by long-term debts, much lower than developed markets.
 
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