By Hiran H.Senewiratne
The current US dollar crisis has negatively impacted the CSE’s foreign investors. It has confronted them with difficulties in repatriating dividend payments made to them by companies, along with other financial gains, CSE chairman, Dumith Fernando said.
‘It is beyond the CSE’s control to resolve their problem. But we have already informed the Central Bank to address this issue but the CBSL has not done anything due to the dollar crisis, Fernando told a media conference held at the CSE office, World Trade Centre building in Colombo recently.
Fernando added: ‘The dollar crisis is the major reason for this and this could sometimes discourage foreign investors from investing in the stock market. However, luckily the stock market is driven by retail investors, and this could not pose a major issue for the CSE.
‘Sri Lanka suffered a Rs. 50 billion worth foreign outflow last year due to the macroeconomic uncertainty, sovereign debt default and exchange rate risks. It has seen a Rs. 2.7 billion outflow so far this year, the CSE data show.
‘Sri Lanka is committed to forging ahead with our reform agenda and with our bid to develop into a strong, stable and resilient stock market and as an attractive place to do business.
‘In terms of the stock market, CSE trades at a discount compared to most frontier markets and is supported by a promising growth potential among listed companies.
‘Over 70 per cent of the listed companies on the CSE have a debt to capital ratio of under 50 per cent and market information shows record levels of investor participation in the market and an Initial Public Offering last year was oversubscribed on the very first day.
‘The shut-down of the CSE this week would mitigate forced selling and other issues pertaining to investors, including foreign investors.’