CSE to expand derivative related product suite
The Colombo Stock Exchange (CSE) is expanding its product portfolio as a direct result of the digitalisation it embarked on two years ago.
The plan to expand, the product suite offering a wider range for investors to choose from is now taking shape, officials told the Business Times on the back of having launched green bonds recently.
They said that regulated short selling and stock borrowing and lending are in the pipeline to be launched, which will have a fair bit of traction in the market. “Debt-related products such as perpetual bonds will be launched soon, and the rules for this have already been published,” one official said.
The CSE has also discussed with the Securities and Exchange Commission to tweak or amend the rules to accommodate State Owned Enterprises (SOEs) in going public without compromising the continuous listing requirements.
The market has not been doing well this year due to massive amounts of cash pulled out by investors to secure fixed income securities. Analysts said that with uncertainties surrounding domestic debt restructuring (DDR), investors are more concerned about capital preservation.
They added that the main concern investors are having is whether the banks will get affected or not. Provided the impact of DDR is low on the banking sector, these stocks will run and in turn the market will recover, they further added.
Noting that the high inflation is persisting, the high interest rates should be curtailed in the medium term, a banker said, noting that there will be further pressure for the borrowers as industries will not rebound.
He said that last year most banks did not encourage credit. With the International Monetary Fund bailout package, and political stability, some borrowers may look at expanding and borrowing again, he added.
Some economists predicted that the benchmark rates on the government securities would go down. They also predicted a sharp decline in the interest rates in the next six months.
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