Pblic sector entities must list at least a considerable percentage of its stake to create an active and strong capital market, Colombo Stock Exchange (CSE) Chairman Vajira Kulatilaka said.
He said this is an alternative to privatization of state entities.
“The government should allow state owned entities to be listed in the CSE, without privatizing them. If that is allowed we could enlarge the scope of the market. In turn it will help establish a stronger capital market in the country and the region,” Kulatilaka told Daily News business.
He said that the CSE is one of the most sophisticated markets in the region and conforms to all global standards. Most important thing is to increase the number of public sector listing to broadbase its scope, he said.
Kulatilaka said strong risk management systems are in places and it is the best option for public to invest in the stock market rather than invest in other instruments. Because it has the potential to grow like other top stock markets in the region, he said.
He said that many years ago the CSE set records in the world. But it would bounce back very soon due to its new infrastructure development and structural changes.This has enabled to attract foreign investors slowly but steadily, he said.
Kulatilaka said all state banks, huge agriculture sector and transport sector companies have not been listed in the market.
“If we do encourage those entities to be listed in the CSE, we could create a vibrant stock market in the region,” he said.
The CSE Chairman also said the new government coming to power in the future must maintain a strong, consistent and sustainable growth for the next five years.
“If it’s so there is no doubt that we could create a strong stock market in the region,” he said.
The government also introduce a proper economic policy framework to encourage state owned entities to list some of its percentage like other countries in the region, he said.
Today more than 80 percent of entities are state owned entities. If those entities get listed in the CSE, we can create a strong capital market in the region with full of foreign direct investments, he said.
Courtesy: Daily News 22 June 2015