Capital Markets
From The Report: Sri Lanka 2016
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The Sri Lankan capital markets are recovering after a period of great change and a measure of controversy. Stocks boomed when the civil war ended, only to fall back as regulation and regulators were unable to keep up with the surge in activity, and manipulation and unfair dealing were alleged. With a new government in power, the apparent wrongs of the past are being addressed and a roadmap for the future is being drawn. Legislation is changing, with rules updated and key market infrastructure under development. At the same time, an overhaul of the exchange and the regulator is under way. These efforts are seen as vital to the future of the country, as efficient, effective and fair capital markets are needed to attract and deploy the capital Sri Lanka needs.
This chapter contains interviews with Rajeeva Bandaranaike, CEO, Colombo Stock Exchange; and Dilshan Wirasekara, CEO, First Capital Holdings.
Articles from this Chapter
The right reforms: Foundations are being set for the future growth of the capital markets
Capital progress: OBG talks to Rajeeva Bandaranaike, CEO, Colombo Stock Exchange (CSE)OBGplus
Interview:Rajeeva Bandaranaike What measures can be taken to reach the CSE’s market capitalisation target of $50bn? RAJEEVA BANDARANAIKE: Given the government’s current GDP growth projections, the country’s capital markets will have to play a significant role in acting as a catalyst for raising funds. We estimate that 25-30% of funding requirements in the future will come through capital markets. In 2015 over Rs100bn ($750m) of equity and debt capital was raised on the CSE. Although…
Exchange of ideas: OBG talks to Dilshan Wirasekara, CEO, First Capital HoldingsOBGplus
Interview:Dilshan Wirasekara Do you expect Sri Lanka to follow the downward trends that are hurting other emerging markets? DILSHAN WIRASEKARA: Despite some negative elements, the markets are relatively shielded, as most investments are domestic. The anticipated rate hike and the Chinese economic slowdown have already had an indirect impact on Sri Lanka in terms of outflows in equity and bond markets. Foreign holdings in the bond market fell from 10.3% in June 2015 to 7.1% by the end of December.…
Sovereign issues: The successes and challenges of building up a healthy debt marketOBGplus
Sri Lanka sold two international bonds in 2015, transactions which coincided with the advent of the new government, and both issues were great successes. They generated significant demand, and pricing was seen as good. In addition, the issues provided confirmation that the international community has faith in the new administration. Indeed, despite having inherited troubled finances, the government seems to be managing the situation well enough to keep the country attractive to international capital. Yield…
Big changes: New legislation is expected to redefine regulatory oversightOBGplus
Sri Lanka’s stock market has grown by leaps and bounds since the end of the civil war in 2009. But while major upgrades to trading infrastructure are well under way, legislation governing the sector – particularly regarding the regulatory body, the Securities and Exchange Commission of Sri Lanka (SEC) – has at times failed to keep pace. However, in 2016 major changes are expected to laws dictating the SEC’s management of the trading of securities. The SEC Act, enacted in 1987, has been amended…
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Hemas Holdings: DiversifiedOBGplus
The Company Hemas Holdings is a diversified conglomerate, established as a family-owned entity in 1948, and listed on the Colombo Stock Exchange in 2003. The group’s operations are aligned into four main business streams: Health care, with a 42% contribution to company revenues, fast-moving consumer goods (FMCG), at 35%, leisure (9%) and transportation (5%). In terms of earnings before interest and tax (EBIT), FMCG and health care dominate, contributing 40% and 47%, respectively, while the leisure and transportation arms of the business contribute 13% and 12%. Hemas also has a number of new ventures ongoing, which currently contribute a negative…
Dialog Axiata: TelecommunicationsOBGplus
The Company Dialog Axiata (Dialog), a subsidiary of Axiata Group was incorporated in 1993 and subsequently converted to a public limited liability company in 2005, listing its ordinary shares on the Colombo Stock Exchange (CSE). Dialog Axiata currently holds the market leadership position in Sri Lanka’s mobile telecoms sector, which contributes to over 85% of its revenue, along with a market presence in the fixed telecoms and digital television operations through its fully-owned subsidiaries Dialog Broadband Networks (DBN) and Dialog Television (DTV). It is one of the largest listed companies on the CSE both in terms of market capitalisation,…
Commercial Bank: BankingOBGplus
The Company Established in 1969 Commercial Bank of Sri Lanka is the largest private sector commercial bank in the country, and the only Sri Lankan banking sector counter represented in the MSCI Frontier Market Index. With a total asset base of approximately LKR816bn ($5.9bn), it has the largest market share in the private commercial banking sector of both loans (14%) and deposits (13.5%) as of June 2015. The bank has healthy mix of retail and corporate clientele, and places a special focus on small and medium-sized enterprises (SMEs). With a network of over 261 branches, wider product offerings and aggressive marketing, Commercial bank has improved…
