Barriers to Investment in Sri Lankan Context; With Special Reference to Colombo Stock Exchange

Research Questionnaire to the Existing Institutional Investor

Institute Information Technology Project ID Supervisor Gunawardana Co- Supervisor

: Sri Lanka Institute of

: P2011-117 : Mrs. Maliendra

: Mrs. Mano Weligodapola

Project Description:
Under academic studies at SLIIT, 4th year students who are following the course Information Systems, have to carry out a group research project which is given a duration of 10 months to complete. The project coordinator is Mr. Jayantha Lal
Amararachchi who is a senior lecturer at SLIIT. Followings are the specified deliverables of the research;

1. Project Registration - 24th January 2. Project Proposal - 2nd,3rd & 4th March 3. SRS/RRD Presentation - 6th , 7th & 8th April 4. Progress Report - 6th , 7th & 8th July 5. Mid review - 24th , 25th & 26th August 6. Final presentation & Viva

As mention above our research topic is Barriers to Investment in Sri Lankan Context; With Special Reference to Colombo Stock Exchange. Main reason for the selection of this topic is that many of our students and lecturers are individual investors of CSE and they have faced certain problems when investing on CSE. And there is a special request from Mr.Thushara Jayarathne, vice director of CSE to do so. According to the research syllabus the whole research has to split into 4 main sub topics and one sub topic should carry out by the one member. Followings are our sub topics; 1. Causes to inactiveness of existing individual investors. 2. Causes to inactiveness of existing institutional investors. 3. Causes to unpopularity of CSE among potential individual investors. 4. Causes to unpopularity of CSE among potential institutional investors. As you can see we need to collect data from individual and institutional investors to identify their investment problems. CSE and SEC are giving their full corporation for this research. As institutional investors you will be able to give us some valuable information to improve the performance of CSE and SEC. So we are kindly requesting from you to give your valuable corporation to make

Questionnaire to Existing Institutional Investor

Company:------------------------------------------------------------------------------------------------------Industry:-------------------------------------------------------------------------------------------------------The year began to invest on CSE: -----------------------------------------------------------------------Contacted Person:------------------------------------------------------------------------------------------Position of the contacted person:----------------------------------------------------------------------(If Possible)

Signature:----------------------------------------------------------------------------------------------------(If Possible)

Number of years in this position:----------------------------------------------------------------------(If Possible)

Address:------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Contact Number: ------------------------------------------------------------------------------------------(If Possible)

Email:--------------------------------------------------------------------------------------------------------

Important: If you are thinking providing answer to any questions is illegal, then leave the question blank. Or if you are thinking that any question is out of your knowledge please leave it also blank.

How to fill the questionnaire;

1. Change the color of the fonts of the relevant answer.
9. Rank the following securities according to your preference of invest; a. Government own shares b. Private own shares c. Treasury Bills d. Treasury Bonds

2. Questions which has to rank can be number as follows;

10.Rank the following securities according to your preference of invest; a. Government own shares--------------3 b. Private own shares---------------------4 c. Treasury Bills-----------------------------1 d. Treasury Bonds---------------------------2

Currently own size of the fund, which has the investment ability (Rupees millions) More than 100000 Between 100000 - 75000 Between 75000 50000 Between 50000 25000 Between 25000 20000 Between 20000 10000 Amount 10000 5000 Betweeninvested on the CSE investments, as a percentage of total own fund mentioned above (Rupees millions) Less than 5000 >= 80% Between 60% - 80 % Between 60% 40% Between 40% - 20% Less than 20% If you have not invested almost all the amount of fund in CSE, why is that? (Can mark more than one) Cannot bear the market risk Due to organizational rules and regulations To invest on other types of investments Other reason Preference level to invest on long term shares (Investments that a company intends to hold for more than one year) High Moderate Less Level of preference to Buy-and-Hold shares; Does not care about that High Moderate Less Depends

To what level do you consider the volume of shares offering, when making trade on CSE? High Moderate Less Does not care about that Level of industry focus when making trade on CSE (You may have preference to invest on companies which are in your industry) High Which types of industries you mostly prefer to invest on , when making Moderate trade on CSE (Rank them according to preference/use numbers) Less Bank ,Finance and Insurance Does not care about that Beverage ,Food and Tobacco Chemicals and Pharmaceuticals Construction and Engineering Diversified Footwear and Textiles Health Care Hotels and Travels Investment and Trusts Information Technology Land and Property Manufacturing Motors Oil Palms Plantations Power and Energy Services Stores and Supplies

Trading

Rank the following securities according to your preference of invest; Shares Treasury Bills Treasury Bonds Corporatetype of companies you prefer to invest your funds, in the current On which Debentures economic situation? (on any type of investments) Government Private Corporations Other type of following difficulties do you face when investing on CSE (Tick What more than one if needed) Lack of knowledge about investment process or about current information Conflicts with stock broker Difficulties with statistical calculations What type of following difficulties relating to knowledge, you face when Other investing on CSE, Lack of knowledge about investment process Not receiving current information Cannot understand fluctuations of share prices Do you have any acts/regulations with your company, which define the Other type of investment you should make and type of investment companies you should engage with, Yes No How do you rank the stock brokers/brokering firms as market intermediate; Very Helpful at anytime Helpful Satisfactory Cannot satisfy

Write down problems you have, when dealingCDS. stock brokers. Write down your suggestions to improve the with

Have you faced any restrictions because of any government laws which prevent your preference of investment on different companies? Yes No

Write down your suggestions to improve the performance of stock brokers as to increase the contribution of institutional investors to CSE investments. If your answer is Yes for the above 18.a question, please write down such few restrictions?

How frequently when obtain investment on CSE? Who advice you do youmaking the service of Credit Rating Agencies? Frequently Fund manager /Financial manager of your company Sometimes Stock Broker Rarely advising mode (web / books) Other Are you obtaining the service of Margin providers"? Never No advisor Have you faced any disadvantageous situations due to Insider Trading of Frequently listed securities? Sometimes Frequently Rarely Sometimes Never Rarely Are you satisfied with the Clearing process of the CDS? Who analyze the financial statements sent by the company which your money Never Very much is invested in? Satisfied Stock broker Not much Financial manager of your company No Accountant of your company Do not analyze the those financial statements

What are the types of Financial Ratios you are mostly engaged with, when doing a quick analysis on the financial statements? (Can tick more than one) Liquidity ratios Asset management ratios Leverage ratios Are you satisfied with the Compensation Fund deployed by the SEC? Are you agree with the current Settlement Cycles (T+3 for shares and Profitability ratios Very much T+2 for debentures)? Valuation ratios Satisfactory (Can tick more than one answer) Cannot satisfy Very much satisfied Need be lengthen for Need toImprovements buyers Need to be lengthen for sellers Need to be shorten for buyers How do youshorten for sellers investors? Need to be think about foreign Good Competitors A Threat Do you have any money invested in foreign stock exchanges? Yes No

If your answer for the above25.a is yes , why is that? What are the advantages of those foreign stock exchanges over CSE?

Rank (Number)the following types of share according to your preference; Ordinary voting shares Preference shares Cumulative Preference shares Redeemable shares

What is your opinion about Corporate Governance practices currently deploy by listed companies of CSE? Maximum governance and control practices Satisfaction level governance and control practices Minimal governance and control practices No governance and control practices Have your company think you should allow affecting management decisions, procedures of the investee Company? Yes No Do you have any policies regarding how to monitor the investee company? Yes No

Write down your suggestions to investee companies to improve an honest, open and ongoing dialogue with you (with Institutional investors)

What type of problematic situations you faced, when trading in CSE? (Can mark more than one) Front Running Market Manipulation Insider Trading Breach of CSE Listing Rules Problems regarding Right issues/ bonus issues/ dividend payment Unauthorized Transaction of Stock Brokers Problems with policies of CSE

Write down your suggestions to SEC as an institutional investor to regulate their job and responsibilities?

Write down your suggestions as an institutional investor, to CSE, to improve the performance of them?

Do you really think youre getting beneficial from investing on CSE? Very much Considerable Not very much No

34.Any other problems you face when making investment on CSE, apart from the above mentioned problems.