CSE seeks foreign listings on new dollar-denominated board

The Colombo Stock Exchange (CSE) and the Maldives Stock Exchange (MSE), in association with the Capital Market Development Authority of Maldives (CMDA), acting under the Memorandum of Understanding (MoU) signed between the two exchanges, conducted a roadshow for potential Maldivian issuers and investors.

The forum, hosted by the CMDA, was held on March 28 and 29, 2016 at the Maldives Monetary Authority Building in Male.

The forum presented the CSE as a secondary listing destination for Maldivian companies and promoted the Sri Lankan capital market to investors. The event marked the first Issuer Forum conducted by the CSE on foreign soil. Over 30 representatives from 20 potential issuers from the Maldives and seven investment banks from Sri Lanka were present at the event. 

The Issuer Forum comes against the backdrop of a strategic initiative by the CSE to introduce a Multi-Currency Board to list and trade companies incorporated and operating outside Sri Lanka. The necessary approvals for the board have been obtained by the Central Bank and the CSE is awaiting approval from the Securities and Exchange Commission of Sri Lanka (SEC). 

Maldives Economic Development Minister Mohamed Saeed, CSE Chairman Vajira Kulatilaka, CMDA CEO Ahmed Naseer and MSE CEO Hassan Manik spoke attended the event. CSE CEO Rajeeva Bandaranaike made a presentation on the benefits of listing and addressed the common concerns on a public listing by potential issuers while CSE COO Renuke Wijayawardhane made a presentation on the listing criteria and requirements.

The forum also featured a Sri Lankan listed company, where Softlogic Holdings PLC Chairman/MD Ashok Pathirage and Head of Strategy Chintaka Ranasinghe shared the experience of Softlogic Holdings using the Sri Lankan capital market to fund their growth.   

Saeed making remarks as the chief guest at the Issuer Forum commended the Sri Lankan listed companies for effective capital market engagement and called on the Maldivian companies to embrace the many opportunities available in the Sri Lankan capital market. Minister Saeed also went on to state that the Maldivian companies strengthened through regional economic corporation is vital to economic development in the Maldives. 

Kulatilaka said that engaging Maldivian companies has long been an objective at the CSE and that reaching out to them first, represents the trust and confidence placed in the Maldives and its business sector. He stated, “We have recently implemented a number of investment and policy measures to give the exchange world-class status. The CSE offers a unique opportunity to raise capital in one of the fastest growing economies in Asia, through an exchange that on average performed better than most major global indices in recent years.” 

Sharing his thoughts at the panel discussion, Naseer urged the Maldivian companies to make use of the opportunity to gain a perspective on investing in the Sri Lankan capital market and to embrace the best practices maintained by the listed companies in Sri Lanka. 

Manik pointed out that listing on the CSE would provide the Maldivian listed companies an opportunity to achieve proper values for their shares. He noted that at present, the shares of listed Maldivian companies do not have the correct values, which is caused by the lack of liquidity in 
the market.  Pathirage noted that sourcing capital is just one benefit of listing on the CSE and outlined that listing also fosters good corporate governance, paves the way for an optimized company structure and helps in growing the organisation through attracting quality talent. 

Commenting on the process of listing foreign companies, CSE CEO Rajeeva Bandaranaike noted that initially only non-resident foreign investors would be permitted to buy and sell securities through the proposed Multi-Currency Board. 

The CSE representatives held one-to-one meetings with the companies listed on the MSE on March 27. Sri Lankan investment banks also had the opportunity to meet the Maldivian companies that were present at the forum on March 28 and 29.