Firstly, it has maintained all the concessions granted to capital market by the previous Governments.Secondly,it is a forward looking budget. It encourages introduction of REITs , an extremely positive step to introduce an alternative investment option i.e. real estate to investors. REITs will enable smaller investors to benefit from returns generated from real estate by investing small amount of money.
Encouragement given to list Dollar denominated securities of Foreign Companies will help Sri Lankan Capital Market achieve hub status in the region. Waiving of the requirement to set up SIA accounts to Foreign investors is also a positive step to minimize administrative burdens for global investors.
The budget has requested to expedite to de-mutualisation process of the stock exchange. This will enhance the Governance aspects of the capital Market. CSE and SEC will work towards achieving the target of completing this process during 2016.
It also encourages setting up Venture Capital and Private Equity Funds an essential pre-requisite for funding business from ideas of entrepreneurs to growth of such businesses These firms will act as feeders to capital market to raise capital or divestitures. It should be highlighted that where ever Venture Capital and Private Equity thrived, the business enterprises developed and the countries achieved growth. An examples are South Korea. Most of the leading Technology companies such as Google, Facebook and Indian IT Companies are funded by Venture Capital and Private Equity Capital.
The budget has suggested to set up a SME board at the Colombo Stock Exchange . We will introduce this shortly. The idea is to offer a listing option for SMEs with less stringent conditions to raise capital. The idea of divestures of non core businesses of the Government and listing of Government owned entities is extremely helpful to the Capital Market growth and to increase market capitalization. Removal of Share Transaction Levy will stimulate trading in the share market thus increasing the liquidity. This will help to address one of the major drawbacks of Sri Lankan share Market.
The budget has supported the minority share holders by increasing the minimum amount of dividend to be distributed by quoted companies
I should say this budget not only helps to activate the Capital Market but also supported a vision to achieve greater heights