By Chandeepa Wettasinghe
Bangladeshi companies are also inquiring from the Colombo Stock Exchange the possibility of listing their companies in the bourse, a top official said yesterday.

“Bangladeshi companies are slowly asking us ‘can we list here?’” CSE Chairman Vajira Kulatilaka said.

He said that this is a significant footstep in making CSE a regional stock exchange. Many Sri Lankan listed and non-listed companies have major operations in Bangladesh, especially in the apparel, healthcare, retail and energy sectors.

CSE will be opening up a dollar denominated board later this year, and it has already signed a memorandum of understanding with the Maldives Stock Exchange to list Maldivian companies on the board. “Most Maldivians don’t want to take rupee risk, and the dollar is a currency of exchange,” Kulatilaka said.The recent development fits neatly into the narrative of the government to make Sri Lanka a financial hub of the region. Kulatilaka said that the current year has been bad so far, with foreign outflows from the bourse due to the global economy, and the recent ratings downgrade of Sri Lanka.

“But it’s a good opportunity for us to build up our institutions and make this a vibrant stock exchange. This is not the end of the world. We’ll have to get through these 2-3 years, which will be the bottom of the business cycle,” he said. Last month Kulatilaka said the CSE would have to look towards the possible listings of state-owned enterprises for growth.

Shares close near 2-yr lows on ratings downgrade

REUTERS: Sri Lankan shares fell more than 1.2 percent to close at its lowest in nearly two years in thin trade yesterday after Fitch Ratings downgraded the country’s rating, while rising market interest rates also dampened market sentiment.

On Monday, Fitch downgraded Sri Lanka’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to B-plus from BB-minus on increasing refinancing risks, significant debt maturities, and weaker public finances. Sri Lanka’s benchmark share index closed 1.27 percent lower, or down 78.41 points at 6,113.40, the lowest close since April 11, 2014.

“It’s a horrible day. Today market dipped mainly because of the Fitch downgrading,” said Yohan Samarakkody, Head of Research, SC Securities (Pvt) Ltd. “Rating of a country is one key area investors are looking for. When it’s downgraded, it’s going to impact.”

Investors are waiting for the country’s negotiations with the IMF for a loan to progress in order to gauge the direction of the market, analysts said. Sri Lanka is in initial talks with the IMF about a loan amid concerns over pressures on its balance of payments, outflows from government bonds and a ballooning fiscal deficit.

The index remained in the oversold territory for the sixth straight session, with the 14-day relative strength index at 21.663, Thomson Reuters data showed. A level between 70 and 30 indicates the market is neutral.

The 182-day and 364-day t-bill yields rose 50 to 55 basis points last week to a more than two-year high, after the central bank raised key policy rates by 50 basis points from record lows.

Turnover was Rs.566.9 million, below this year’s daily average of Rs.705.5 million.

Foreign investors were net buyers for the third straight session, purchasing Rs.14.5 million worth of shares. Shares in Ceylon Tobacco Company PLC fell 2.99 percent, while Bukit Darah PLC fell 6.27 percent and Carson Cumberbatch PLC fell 13.25 percent.

Conglomerate John Keells Holdings PLC fell 0.88 percent.