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Tuesday, June 03, 2014 - 05.52 GMT

SL sees Emerging Market Entry on IPO Outlook – CSEC Chairman


Chairman of the Securities and Exchange Commission Dr Nalaka Godahewa said he aims to get the country’s stocks into the MSCI Emerging Markets Index as soon as next year.

He said Sri Lanka needs a company to list $500 million of equity to become eligible for promotion to the emerging-market index from the frontier-market gauge.

“If one or two large existing companies increase their current public float to 20 percent, we are easily there,”Godahewa said in an interview in London. “I am hopeful that this will happen in 2015.”

Sri Lanka is seeking foreign investment to fuel an economy that has been growing at around 8 percent a year as the country recovers from a three-decade war. MSCI indexes are tracked by investors managing about $8 trillion in assets.

Companies raised about $20 million in three Initial Public Offerings (IPO) this year, an increase from $3.8 million in one IPO last year, according to data provided by the bourse.

Godahewa said he aims to double the exchange’s $20 billion market capitalization in the next three to four years.

The Sri Lanka Colombo Stock Exchange All Share Index has climbed 5.9 percent this year and trades at 14.3 times reported earnings. The MSCI Emerging Markets Index has advanced 2.5 percent in the period and is valued at 12.8 times.

The exchange is in ‘serious discussions’ with as many as 45 companies seeking to list over the next three years and is targeting adding up to five more offerings this year, Godahewa said.






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Last modified: June 03, 2014.

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