Plans for dollar listings on CSEFebruary 9, 2016, 6:19 pm
By Hiran H.Senewiratne
The Colombo Stock Exchange (CSE) is now in the process of allowing foreign companies/investors to invest in US dollar denomination instruments in the stock market to make the market attractive globally, its chairman Vajira Kulathilaka said.
"We are now preparing rules and once the Securities and Exchange Commission (SEC) gives the approval we could go ahead with plans to promote foreign listings and investments in the CSE in the US dollar denomination, which would apply to only foreign investors, Kulathilaka told The Island Financial Review.
He said they are predicting large inflows of foreign funds to the CSE this year and are expecting the rupee to strengthen against the US dollar on the back of it.
When we have a dollar board in CSE, it would encourage and attract foreign investors in a big way. In turn, all the dollars will stay inside the Sri Lankan banking system due to these transactions, he said.
Foreign investors are very interested in investing in US dollars than get into rupee units because they are uncertain as to where the rupee would be when they want to exit, stock analysts said.
President, Colombo Stock Brokers Association Ravi Abeysuriya said that this was an excellent move to attract and encourage foreign investors into the CSE.
He said that foreign companies and BOI companies could be listed in the CSE in US dollar denominated instruments which will help to promote the CSE as one of the top places to invest in the region.
"It has been brought to our notice that foreign investors have been investing more than US $ 3 trillion in emerging markets. Therefore, with the introduction of the dollar denominated security for foreign investors we would become an attractive market for investors from all over the world, Abeysuriya said.
The CSE is one of the most modern stock exchanges in South Asia with a fully automated trading platform. Moreover, it has been one of the best performing stock markets in the world with market capitalization of over US$23 billion and average daily turnover rising to over US$18 billion, observers said.
Last Updated Oct 22 2016 | 08:10 pm