CSE in talks with firm to list on foreign currency platform
The Colombo Stock Exchange (CSE) is in discussion with a local company with dollar earnings to go public on the Multi Currency Board (MCB), officials said.
This came after the CSE got approval last July from the Central Bank allowing local companies intending to go public on the MCB to open foreign currency accounts for transactions.
A circular issued in July by the Department of Foreign Exchange of the Central Bank authorised companies incorporated here and publicly listed in the CSE to open Special Foreign Currency Accounts (SFCA) to facilitate foreign currency denominated investments on the CSE.This approval will enable the launch of the second segment of the MCB.
Officials said many large companies transacting in dollars requested this facility to raise capital in dollars for regional expansion and the like. “We are discussing with a company to list on the MCB and it is looking rather positive,” a CSE official said. He said that some firms wanted all investors, including retail to be able to trade in dollars which the CSE is exploring.
But, the current dollar crunch in the country is the only barrier to these ambitious plans, he added.
The initial segment of the MCB was introduced over three years ago for dual currency trading and settlement of foreign currency denominated securities allowing foreign firms to trade on the CSE through strong currencies including Chinese Yuan etc.
The CSE got Exchange Control approval to list foreign companies in the CSE in April 2016 to allow for the first segment of the MCB. A foreign company that seeks a listing in the MCB must be first listed in the stock market of that country, and it will be a cross listing of shares – which is when a firm lists its equity shares on one or more foreign stock exchange in addition to its domestic exchange. The CSE will be pursuing foreign firms to list on the MCB this year, the official said.
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