SOFTLOGIC STOCKBROKERS
Q: Following Softlogic Stockbrokers’ recognition at the 10th CFA Society Sri Lanka Capital Market Awards, could you share your sentiments on being acknowledged for excellence in reporting?
Dihan Dedigama (DD): We are very proud of our research team for this achievement. The last couple of years have been extremely challenging but we sustained research operations and in fact, increased focus on research to maintain the quality of service we offer to our clients.
Q: What is your take on this year’s theme for the awards ceremony – ‘Invest Smart, Build Resilience, Thrive in Sri Lanka’?
DD: The theme says it all! Sri Lanka has been resilient through various challenges and invariably comes out stronger from every crisis! Even when our capital markets emerge from a downturn, the turnaround delivers good returns to investors. Patience and resilience eventually pay off.
Q: How important is it for companies to invest in improving the depth and quality of analysis when it comes to investments?
Director
Chief Executive Officer
DD: Investors consider corporates that have value, and are open to investor relations and willing to share information that research companies require to prepare thorough equity market reports.
Businesses should engage with research companies and fund managers to connect with potential investors. There has been a growing trend of more companies setting up separate investor relations units as a value added service.
Q: And how does Softlogic Stockbrokers view the importance of the environmental, social and governance (ESG) framework?
DD: In Sri Lanka, awareness about ESG reporting is still at a nascent stage. However, the investment decisions of foreign investors are based on how strongly a company is focussed on ESG.
The way you do business, how much social and environmental commitment you demonstrate, and whether you’re dedicating adequate resources to ESG matter. Local companies seeking foreign investment will also have to adopt ESG compliance.
Q: What more needs to be done to recognise excellence in sustainability reporting in this country?
DD: There definitely needs to be more recognition for companies that are generating renewable energy and so on. They should be recognised and rewarded with attractive tax structures as an incentive for more companies to go down the ESG route.
Q: Could you shed light on Softlogic Stockbrokers’ plans for the coming six months?
DD: Softlogic Stockbrokers is a leading provider of equity research, providing high quality economic research and analysis. We will continue to build on this legacy.
Looking ahead, we are focussed on regional branch expansion in line with the Colombo Stock Exchange’s (CSE) expansion.
Furthermore, we will continue to deploy adequate resources to meet demands from clients and become a smart organisation.
Q: How important is it for companies to invest in improving the depth and quality of analysis when it comes to investments?
Raynal Wickremeratne (RW): Improving the quality of research becomes a key focus as a country faces volatile macroeconomic conditions. This has become increasingly apparent in Sri Lanka over the past couple of years as economic factors and key policy decisions have been the driving force of the country’s capital markets.
As such, taking a deep dive into investment analysis beyond the standard parameters becomes a key part in the quality and accuracy of financial research.
Q: In your opinion, what investment trends and opportunities are worth capitalising on?
RW: Sri Lanka faced major hindrances to businesses by way of fuel and electricity shortages in 2022, coupled with inflation that was seemingly spiralling out of control. Since then, the country has taken major strides towards recovery and as inflation begins to normalise, economic growth will remain the key focus of policy makers.
Senior Manager
Co-Head of Research
As the baton of emphasis is passed on from inflation to economic growth, a lower interest rate environment and other forms of controlled economic stimulus take centre stage. Industries that remained muted – such as construction – may witness a strong recovery in the next three to five years. This may be an aspect worth capitalising on upfront for investors with a slightly higher risk appetite and who are looking to enter a sector prior to its recovery.
Q: What were the main challenges faced by Softlogic Stockbrokers over the last 12 months? And what steps are you taking to overcome them?
RW: Over the past few years, local capital markets have witnessed a welcome influx of retail interest in equity markets, given that Sri Lanka typically saw a relatively low level of stock market participation in comparison to its working population.
This shift has also created the need for investment research to cater to a new segment of the market that previously had not received the focus it deserved. And this period also saw the meteoric rise of technical analysis, which has once again been led by the retail drive.
The company has significantly increased its emphasis on the dissemination of reports and general information, with a special focus on retail markets with the use of innovative technology and partnerships with platforms such as Dialog Genie to enable investing in the CSE through the mobile app.
Telephone 7277000 | Email ssb.inquiry@softlogic.lk | Website www.softlogicstockbrokers.lk
