Courtesy Adaderana

The Colombo Stock Exchange (CSE) should aim at increasing the number of listed companies from the current number of about 200 to 500 firms, State Minister for Finance, Capital Market and Public Enterprise Reforms Ajith Nivard Cabraal stated.

The digitalization will take away from you, from the brokers as well as the market players a lot of the paperwork and the mandate tasks that have been so far done by you personally. When you are relieved of those duties, I’m sure you will find enough time to make this market work. The Stock Exchange is really the market. The market is buyers and sellers. You need to have buyers, who are increasing and you need to have sellers also who will be providing the supply of the shares in this instance. So, you need to focus on several areas and aspects of this market. First, you have to make sure that the number of shares that you have is expanded regularly. I have been there long enough to know that the number of companies traded in this wonderful Stock Exchange have remained almost stagnant for so many years. Every time when someone asks how many companies are there in the Stock Exchange, we said 200 something. Now, this 200 something has been the number for the past 30 years I think. So, for the next 5 years, we would like to see that number being spoken of as 500 something. I think you can do that. The chairman already mentioned that there is an effort to make these numbers grow and I think if all of you take the pains to do that, then there would be ample opportunity to make that happen,” he stressed.

The state minister made these remarks whilst addressing a special market opening ceremony which was organized today (17) by the Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) under the patronage of  Mahinda Rajapaksa, the Prime Minister of Sri Lanka to mark the Digitalization of the Sri Lankan Stock Market.

Speaking further  Cabraal also expressed the following:

“In 2014, when  Prime Minister, Hon. Mahinda Rajapaksa relinquished to the office, at that time end of 2014, the market capitalization of the CSE was $ 25 billion. By the end of 2019, afraid it has come down to half of that. It was just $12.5 billion. There was a massive drop. It was actually half. So, now we need to grow this market again. We need to make sure that your efforts are directed in making this market to expand as well. This is vital, because after all, as the Director-General of the SEC said, you want the government to come here and use this as the repository of the funds, you got to also be able to provide that. If you are with the $12.5 billion market gap, I don’t think you can do that. So, set your sights high. Set your sight at a $60 billion if I may suggest for the next 5 years. Then you will have a capacity where you can provide funding, not only for the government sector but for the private sector as well.

“We need support and commitment towards the Stock Exchange. I would like to see a direction being taken by all of you, to take this forward. You have started with a digitalization, I think you need to now build on that foundation. There will be plenty to do on that. You got to make sure that you bring in the capital that will be supporting this market and that is not going to be easy. I remember from 2007 onwards, we have been going abroad, we have been making sure that this capital is adequate in this country. Where ever we couldn’t’ raise it locally, we raised it from foreign sources, so you need to do that, you need to provide the capital for the companies, you need to provide capital so that new instruments can be also put into place in this country. We would like to see an SMI Board, SME Board, we would like to see a Startup Board, maybe an IT Board, maybe BOI companies to be listed. So there is plenty of space for you. Now that you got the first hurdle going, the next would be also exciting and we would like to see you doing that. So, there is plenty to do and let’s do it together. So, that we can asher in era of propseperity in our country with a truly representative investor community.”