The Government will formulate plans to list certain state enterprises after the budget in November, according to highly placed sources. “The government is planning to list some state entities after the budget,” a source told the Business Times, adding that now is the best time to do so.
In the meantime, Deputy Minister Finance and Senior Advisor to President, Dr. Sarath Amunugama, told the Business Times on the sidelines of the first Investment Day organised by the Securities and Exchange Commission (SEC) on Tuesday that the government is ‘positive’ on publicly listing some state entities. “The state is interested in listing some entities, but we haven’t still worked out the modalities,” he said.
The sources said that after SriLankan Airlines Catering and Shell Gas go public, Ceylon Petroleum Corporation (CPC), Ceylon Electricity Board (CEB), SriLankan Airlines, ITN and Sri Lanka Insurance Corporation (SLIC) will follow suit.
“The government is discussing to list about 15 to 20% of each entity at the Colombo Stock Exchange to initially retire their debts and then streamline these entities. Listing brings in better corporate governance and better performance to these entities,” a source said.
Dr. Amunugama, speaking at the event noted that the time has now come to think big and dream big. “All others are thinking ‘super big’. Just like India and China aiming to double their growth Sri Lanka must move forward steadily with investors being given the confidence that they have the capacity to drive forth growth and must do so rigorously and competitively,” he said.
“It is now time to expand the SEC in an aggressive manner to net in those who are willing to invest but lack information to do so,” Dr. Amunugama added.
He said that now the economy should not be chugging along like an old ‘thallu start’ Ford but must cruise along like a sleek Mercedes Benz. Dr Amunugama said that the first sign in the new economy is the Middle Class who should be introduced to the stock market.
He said that investors are now actively participating in trading and foreigners who left the country taking away nearly $ 600 million within months are now returning.
He added that interest rates are down which has diverted investor attention into the Colombo Stock Exchange (CSE). “Firms must raise capital on their own without crying to the state for all little things and realise that CSE is one such way to do so,” he added. SEC Chairperson Indrani Sugathadasa noted that of the 530,000 registered CSE account members, 80% are active at present.
She said that it is important to uphold the integrity of the capital market while broadbasing it.
Malik Cader, Deputy Director General SEC noted that the market is now booming in a fairy tale fashion. “The market is rising to almost 100% and it seems as if a fairy tale is coming true,” he added.