Shares to be listed and traded in foreign currencies | Page 2 | Sunday Observer

Shares to be listed and traded in foreign currencies

8 December, 2019

The Colombo Stock Exchange (CSE) is ready with the framework for foreign listed entities to trade on the multi currency board which will enable overseas companies to gain value for their shares, said a senior official of the CSE on the sidelines of a media get-together last Thursday.

He said the CSE is ready and it is a matter of getting through the Memoranda of Understanding with the foreign listed companies, to commence listing of overseas entities for trading of shares.

The CSE commenced work on the proposed multi currency board in 2016 to provide an opportunity for foreign listed companies to list on the Board where trading in strong currencies will be made available.

According to the CSE official, many foreign entities from the Maldives and Bangladesh have expressed an interest in listing on the Board. A foreign company that seeks a listing, has to be first listed on the Stock Exchange of that country.

The multi currency board offers foreign companies an opportunity to access a diversified pool of investors through Sri Lanka where shares of foreign companies can be listed and traded within Sri Lanka, in a foreign currency. CSE Chairman Ray Abeywardhane said since the completion of the presidential election on November 16 there has been an upsurge in the market with greater positive sentiments among investors who had been holding back on investing, till stability and direction was restored in the country.

“We have seen the indices moving up in recent weeks following the tough time that the SCE went through and we hope the growth momentum will continue in the coming months enticing more companies to list on the stock exchange and increase their shares volumes,” Abeywardhane said, adding that there needs to be lot more push as there is much expectation from investors on equity investments.

The daily turnover at the CSE has increased from an average of around Rs. 600 million to over 725 million and volume in terms of number of trades has too, increased according to CSE data.

“There is an air of expectation that the market will improve with greater volumes of trading,” Abeywardhane said. However, despite the positive sentiments among local investors net selling by foreign investors amounting to over Rs. 1.5 billion has been seen in the recent days. The CSE expects to have more investment instruments in the stock exchange. The Rs. 2.29 trillion Employees Provident Fund was restricted from investing in the CSE since 2016.

The CSE is hopeful that listings in the ‘Empower Board’ (set up by the CSE to provide a platform for small and medium sector enterprises to raise capital), will have SME entities listing in the coming year.