Home Listing rules Foreign net inflow for 2022: Rs. 37 billion – Head of CST

Foreign net inflow for 2022: Rs. 37 billion – Head of CST

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The total market turnover of the Colombo Stock Exchange (CSE) in the first nine months of this year was recorded at Rs. 567 billion, Colombo Stock Exchange Chairman Dilshan Wirasekara said.

He said the average daily turnover was Rs. 3.3 billion which he considers satisfactory given the local and global economic conditions.

He told Sunday Observer Business that most markets around the world have also seen declines since the start of 2022 and that in Sri Lanka too the benchmark for all stock prices (ASPI) has down 18.8% at the end of the first nine months of the year. The S&P SL20 Index, which includes the 20 largest and most liquid stocks, was down 25.2% for the same period.

“However, a redeeming factor is that market activity levels have been favourable,” he said.

Commenting on the net foreign exchange inflows to date, he said that since 2017, the CSE has recorded a positive net inflow as of 14 October 2022. “We have a net inflow of Rs. 16.7 billion in the secondary market and a net inflow of Rs. 20.3 billion from the primary market. Hence, the total net inflow of foreigners for 2022 is Rs. 37 billion.

“The CSE and the stock brokerage industry continue to engage with institutional investors, although a road show may not be expected in the immediate future. We hope to re-engage foreign institutional investors next year,” Wirasekara said.

Regarding regulatory developments, he said that the CSE had just completed a major exercise to overhaul all the rules to comply with the new SEC law and that these are under review by the DRY.

“We have also been working on a project to expand the listing framework to facilitate the listing of debt securities and shares of public companies. The guidelines to be adopted by the CSE to grant exemptions from the registration rules for public companies and the amendments to the rules have been presented to the regulator for approval,” he said.

This will allow public companies to raise debt and equity through the capital market.

The CSE has also worked to enable local businesses to raise capital denominated in foreign currencies by listing debt securities on the CSE. In this regard, rule changes still need to obtain regulatory approval.

In accordance with the new SEC law, new dispute resolution rules are being developed to provide better protection for investors.