Governance and stability unlocking SL stock market potential
The merits of stability were highlighted by a top official, noting that the quality of investors in Sri Lanka has seen a marked shift to those who value governance.
Treasury Secretary Dr Harshana Suriyapperuma, making a keynote address at the Securities and Exchange Commission (SEC)’s “12 Pillars, One Vision” programme on Wednesday, highlighted the importance of stability in the country. He said that borrowing interest rates have been reducing for some time due to the stability, while inflation has been contained. “The governance framework established by the government has been getting international investor attention. They are looking at Sri Lanka and willing to pay a premium for governance,” he said.
Krishan Balendra, Chairman of John Keels Holdings, presenting on the success of his group in raising money from the capital market, noted that corporates need to consider diluting certain percentages of their high shareholdings and go public on the Colombo Stock Exchange (CSE).
“I would urge all of you from the corporate sector who have not listed your company to witness John Keels holdings as an example, which has used the capital markets to grow the business, but also to have a positive impact on the Sri Lankan economy. I would strongly urge you to look at going public, and for those who already have listed their companies, with families who have a significant stake, can also look at selling down some percentages and still retain control. The state-owned enterprises should also consider coming into the stock market. Some strategic state-owned enterprises can seriously consider selling down part of their shareholding in the CSE and use that capital to fund their growth.”
Sri Lanka’s Labour Minister and Economic Development Deputy Minister, Dr. Anil Jayantha Fernando, emphasised the importance of capital market reforms in driving the country’s next growth phase. He highlighted the need for quality capital formation and the need to bring domestic savings together, as they are scattered and fragmented. Fernando urged regulators and market participants to reduce barriers to entry and dispel myths that markets are only for large investors. The SEC’s new programme aims to modernise market infrastructure, widen participation, and create new capital raising instruments.
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