CSE will maintain growth momentum next year
The Colombo Stock Exchange (CSE) will next year be expanding into local regions with four branches and plans to do roadshows in the UAE and Europe. “We will see the market sustain, and increase next year,” CSE Chairman and Asha Phillips CEO, Dimuthu Abeysekera said.
Observing that foreign selling last year was at Rs. 20.5 billion, he said that this year it will be around Rs 37.5 billion. “The foreign investors made profits. So, they need to take it to the shareholders. That is why we will see such an outflow.”
He also said that with the increase in the country’s rating, Sri Lanka’s capital market will see growth, adding that with high earnings, Sri Lanka’s share market will post high growth.
Confirming this, Ruchir Desai Co-manager Asian Frontier Capital said that Sri Lanka’s earnings this year are really strong.
He added that there is a high loan growth in all commercial banks in the country this year. He also noted that the bottom-up earnings momentum in the country is extremely high and in the next two years sustaining this moment will fetch foreign investors into the market.
Banks need to be enabled capital market listing and, thereby given a platform for creating wealth, he added.”The Bank of Ceylon and People’s Bank command 40 per cent of the banking assets in the country. If at least 10 per cent is listed in the CSE there will be a considerable upside in the market cap of the CSE,” he added. He also said that it will also bring in governance while the government will still have the super majority and control.
Standard Chartered Bank Economist Saurav Anand highlighted three main categories of investors currently engaging with Sri Lanka: holders of dollar bonds, buyers of local-currency government securities, and corporate investors exploring foreign direct investment opportunities noting that all exhibit a broadly positive outlook, driven by Sri Lanka’s conformity to IMF benchmarks and the expectation that nominal GDP could reach $100 billion during the programme period.
Stating that foreign holders of government securities are particularly worried about policy continuity and exchange-rate stability, while corporate investors are focused on structural reforms and geopolitical positioning, he said that certain multinational companies have already conducted exploratory visits to identify potential project opportunities and entry points into the market.
“The recent Cyclone Ditwah raised early investor inquiries about fiscal space; however, concerns have remained limited due to stronger-than-expected fiscal performance. The greater risk lies in the potential impact on the external account if reconstruction demands exceed inflows.”
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