Capital market listing more attractive for investors now – CSE

Indunil Hewage


Level of financial literacy in Sri Lanka is relatively low among entrepreneurs as well as investors, Dhammika Perera, Deputy Director General and the Officer-in-Charge of the Securities and Exchange Commission of Sri Lanka said.

He made these views addressing a seminar on “Unlock the Value of Your Company”, in Colombo.

Colombo Stock Exchange(CSE) and Securities and Exchange Commission of Sri Lanka (SEC) have embarked on a constructive awareness endeavour in Sri Lanka to create awareness about benefits of listing in CSE not only among the investors, market participants but also among groups such as entrepreneurs, business community and even financial journalists.

Perera noted that the total amount of capital mobilized by the businesses through the market in 2013 had been gigantic Rs 95 billion, out of which around Rs 65 billion was through debt.


CSE CEO
Rajeeva Bandaranaike

“With the interest rates coming down in a very unprecedented way in Sri Lanka, savings in your bank is not going to give you an attractive interest rate. Hence capital market is becoming more and more attractive for investors. I can see a huge potential even for entrepreneurs, business community to tap the market and mobilize long-term capital in any country,” Perera said.

Colombo Stock Exchange Chief Executive Officer Rajeeva Bandaranaike said, ASPI has significantly outperformed global market indices such as Dow Jones , FTSE, MSCI World and DAX and ASPI has also outperformed some of the best performing regional indices namely, Bombay, Jakarta, Hanoi, Dhaka, Philippines and Thailand.

As many as 100 companies have listed since 2010. About Rs 124 billion have been raised through new listings and further Rs 131 billion have been raised through right issues. In the recent past, the market witnessed a positive flow of foreign investments, epitomizing foreign investor confidence in Sri Lanka’s economic prospects.

Net foreign inflows in 2012 reached Rs 40 billion and in 2013, Net foreign inflows recorded Rs 32 billion. Capital raised through debt issues soared to Rs 10.5 billion by end April 2013, compared to Rs 12.5 billion in 2012 and Rs 1 billion in 2011.

“In terms of cost of listings, Colombo is relatively cheap in getting listed compared to some other markets in the world. The capital market is one primary tool which allows you to access a large amount of capital. Listing on the CSE brings with it a number of benefits, in addition to the raising of capital. A company is able to enhance its corporate profile through visibility, attribute an objective value to the company, obtain tax incentives and create and optimal capital structure,” Bandaranaike said.

“The country seeks to project itself as a knowledge hub, therefore the development of IT industry is vital .By listing on the stock exchange, IT companies are able to better strengthen their internal structure and become more attractive to potential strategic investors who would value transparency and governance,” Madu Ratnayake ,Chairman SLASSCOM and Head of Digital, SVP and GM, Virtusa said.
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