In her address at the opening of the Forum, FCMC Chairwoman Santa Purgaile emphasised: “At present, many sectors have been affected by the Covid-19 pandemic. However, the responsibility of those industries that are not put on the frontline against Covid-19 is to think of what is going to happen after the pandemic ends. How to strengthen a business environment and national economy in Latvia, to diversify the potential sources of funding for local companies and to advance the financial and capital markets development to support Latvia’s growth.”
Jim Turnbull, Associate Director and Head of Local Currency and Capital Markets Development at the European Bank for Reconstruction and Development (EBRD), stressed: “The objective of encouraging domestic investment by the region’s investment and pension funds is highly desirable but it also relies strongly on the availability of suitable and varied products. Key to this is creating an ecosystem that allows a wide range of participants from state-owned enterprises (SOEs) to small businesses (SMEs) to tap the markets for funding.”
Turnbull also pointed out that the Baltic markets are rather small and transactions may not be large enough to attract the interest of institutional investors, thereby the Baltic States and the EBRD have been involved in discussions with leading index providers such as MSCI to have all three Baltic States included under a single classification.
“Latvia’s stock market is currently considered illiquid, it has experienced difficult times and downturns over the last 20 years. The stock market capitalisation ratio to gross domestic product is the lowest in the European Union. The European Commission has presented a new ambitious action plan to promote the European Union’s (EU) capital markets union. Latvia still has to do plenty of homework for its successful inclusion in the EU initiatives. The FCMC has developed the 10-step programme for the development of Latvia’s capital markets, which is integrated into the Financial Sector Development Plan for 2021-2023,” Ģirts Rūda, the member of the FCMC Board, noted.
The 10-step programme outlines three work streams: the role of the State, capacity-building for issuers and investment promotion. A number of issues such as the development of capital market strategy and tax incentives focusing on investments by institutional and private investors in Latvia’s capital market are under the responsibility of the State, as well as the necessity to review the regulatory burden to make it more efficient. Another important task is to promote financial literacy regarding investments at a national level; this will be the key task in the future financial literacy strategy.
Three panel discussions were held on following topics:
The 10-step programme for the development of capital market is available here: https://www.fktk.lv/wp-content/uploads/2021/01/10-step_programme_LCM_development.pdf.
More information and video recordings are available here: https://www.fktk.lv/mediju-telpa/nozares-temati/latvijas-kapitala-tirgus-forums-2021/.
For further information:
Communications and Financial Literacy Division
Financial and Capital Market Commission
Phone: +371 67774808