‘Sri Lanka lagging in stock market development in the region’

Although there has been a ‘phenomenal increase’ in recent times in foreign investor participation in the Colombo Stock Exchange, Sri Lanka trails many prominent foreign investment destinations in the South and South-east Asian regions with regard to important aspects of stock market development.

For example, Sri Lanka’s market capitalization as a percentage of its GDP is currently only 23 per cent while the corresponding data for Vietnam, Bangladesh and Thailand are, 53 percent, 70 per cent and 100 per cent respectively. However, the corresponding figure for Sri Lanka in 2014 was 29 per cent. Thus, there has been a slide on this score on the part of Sri Lanka.

The above information was provided by Colombo Stock Exchange chairman Ray Abeywardene during an interaction he and other high-ranking CSE officials had with the media recently at the Ramada Hotel, Colombo to mark Abeywardene’s induction as CSE Head. During the cordial ‘meet and greet’ session he fielded a number of questions from the media and provided clarifications on matters of vital importance to the CSE and its development.

CSE turnover has proved substantial in recent times but it pales beside, for example, Vietnam’s 88 million dollars per day and Bangladesh’s 100 million dollars per day.

Abeywardene stressed that it is vital to bolster the CSE’s foreign inflow by getting local institutions such as the EPF, ETF and SLI to ‘come in.’ This is lacking at the moment.

He said that it is hoped that the Dollar Board which the CSE hopes to set up by year end will be a vital stimulant to greater foreign investor participation in the CSE. This would be a useful means of facilitating Listing on the CSE by companies in neighbouring countries. This task of establishing a Dollar Board, the CSE chief pointed out, could not be put off any longer.