FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post


ADVERTISE
Poll

EXCHANGE RATE PREDICTION: 2022

 
 
 
 

View results

ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» In STOCK MARKET despite all odds, there is always hope. Never ever give in nor give up.
by atuts Today at 2:14 pm

» The war in Ukraine is no longer shocking the wheat market
by ResearchMan Yesterday at 2:10 pm

» India raises import tax on gold to support rupee and amid trade deficit
by ResearchMan Yesterday at 2:09 pm

» When will supply chain disruptions ease?
by ResearchMan Yesterday at 9:57 am

» KHL Massive forex gains close to 6 billions
by rajini Fri Jul 01, 2022 10:54 pm

» Tourism in Sri Lanka: One step forward, two steps back
by rajini Fri Jul 01, 2022 9:21 pm

» Expolanka to continue its winning streak
by samaritan Fri Jul 01, 2022 4:12 pm

» Govt gets its priorities wrong
by samaritan Fri Jul 01, 2022 10:25 am

» Ambassador assures U.S. support to Sri Lanka to find solutions to economic issues
by samaritan Fri Jul 01, 2022 10:16 am

» IMF-Sri Lanka bailout talks end without a deal
by ChooBoy Fri Jul 01, 2022 9:16 am

» Sri Lanka Breaks Into Hyperinflation Zone Amid Dollar Crunch
by CHRONICLE™ Fri Jul 01, 2022 8:11 am

» Sri Lanka needs to do more on debt restructuring before a bailout package is finalised, says IMF
by CHRONICLE™ Fri Jul 01, 2022 8:06 am

» Global COVID cases rise as BA.4 and BA.5 expand
by samaritan Fri Jul 01, 2022 7:04 am

» POSITIVES & TARGETS BY IMTIAZ BUHARDEEN
by Gowri123 Wed Jun 29, 2022 4:38 pm

» We’re seeing a shift toward international and value stocks, says Schwab’s Kleintop
by target1 Wed Jun 29, 2022 2:40 am

» Wall Street stumbles as consumer pessimism stokes growth fears
by target1 Wed Jun 29, 2022 2:34 am

» Free Market Capitalism vs. Crony Capitalism
by target1 Wed Jun 29, 2022 2:30 am

» Sri Lankan corporations reap large profits as workers and rural toilers face poverty and starvation
by CHRONICLE™ Tue Jun 28, 2022 6:37 pm

» අද රාත්‍රියෙන් පසු, යක්ෂයාගේ හෝරාව ඇරඹේ!
by God Father Tue Jun 28, 2022 6:13 pm

» Derana 360 with Minister Dhammika Perera
by samaritan Tue Jun 28, 2022 1:07 pm

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » SEC mulls minimum credit rating for debt issuances

SEC mulls minimum credit rating for debt issuances

Go down  Message [Page 1 of 1]

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics

The Sri Lanka’s capital market watchdog Securities and Exchange Commission (SEC) is currently considering the restriction corporate debt issuances which are coming with below investment grade, according to a top SEC official.

Director Capital Market Development at the SEC, Vajira Wijegunawardane yesterday told a forum that the market should not allow issuances with low ratings to be listed even in the second board as failures could damage investor confidence which sometimes could never be regained.

“This is something we are currently looking at to see whether we can restrict them,” he said, speaking at a round table discussion on the Corporate Bond Market (CBM) outlook.

According to the Colombo Stock Exchange’s (CSE) listing rules, a company can list its debt instruments in the Second Board irrespective of their credit rating. However listing in the Main Board requires the debt instrument to have the investmentgraderatingof BBB.

Be it the Main Board or the Second Board, the risk associated with the instrument is the same and thus the investors become vulnerable by investing on such low rated bonds, some analysts point out.

Another section of analysts argue that there should be debt instruments with different risk and return profiles as investors assume different risk appetites. They also said that the regulator should not regulate issuer’s rating, but the investment bankers who manage these issues.

Meanwhile, the CSE Director Vajira Kulatilaka said that unsophisticated investors could sometimes be driven more by a higher interest rate than the credit rating of the debt instrument. “In fact we insisted the minimum should be at least BBB+ and not anything below,” he remarked.

Kulatilaka who is also the CEO of NDB Investment Banking Cluster is one of the members in a committee that decides on the minimum issuer ratings.

Sri Lankan companies are currently in a debenture rush, getting the maximum benefit of the withholding tax exemption allowed on such interest income. Year-to-date, 18 Lankan companies have raised as much as Rs. 40 billion through debentures, breaking the previous highest of Rs. 15 billion recorded in 2010.

“People simply cannot bear a single debenture issue failure at this pace market growth. We have to be very careful in getting credit ratings. So, we are very careful in deciding who should come to the market,” Kulatilaka stressed. In 1996, Bangladesh suffered a debenture issue failure and the corporate debt market never recovered since then.

These comments were expressed at the International Organization of Securities Commissions (IOSCO) Asia-Pacific regional committee, CBM outreach program in Sri Lanka hosted by SEC at Colombo Hilton.
http://www.dailymirror.lk/mirror-stock-watch-live/37870-sec-mulls-minimum-credit-rating-for-debt-issuances-.html

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum