A special market opening ceremony was organized by the Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) to launch the complete digitalization of all operations of the CSE to create convenience and enhanced market accessibility for all Sri Lankans yesterday.
The launch event themed ‘Hyper-Leap to the Future’ was held at the CSE under the patronage of Prime Minister Mahinda Rajapaksa. The event saw the launch of some key digital products which included new and improved CSE mobile app, New CSE website, New Central Depository System (CDS) website, New- redesigned SEC website and SEC YouTube channel.
Speaking at the event, SEC Chairman President’s Counsel, Viraj Dayaratne said the complete digitalization of all operations of the Colombo Stock Exchange is a fundamental transition that will usher in a new era for the Sri Lankan stock market.
“The achievement is undoubtedly the most significant achievement since the Automated Trading System was introduced way back in 1997 and this will ensure that the Sri Lankan stock market has all the sophistication and efficiency that is required to attract foreign as well local investors. The SEC also believes in ensuring that we have in place a robust regulatory regime that can create confidence in the stock market and safeguard the interests of the investors.
At the same time, we are aware that it is our duty to ensure that we facilitate the development of the market and as such we are determined to create a balance between regulation and development of the market. We assure that we will play a proactive role in the development of the stock market and partner all stakeholders in taking our market to the next level – to that of an emerging market in the not too distant future,” Dayaratne said.
He said that a strong government, the political will and prudent economic policies are a must if the capital market is to prosper and moreover, the government has in no uncertain terms demonstrated its commitment towards the development of the capital market and the allocation of capital markets to the subjects.
“Furthermore, we need to increase the depth and the breadth of the market to the SMEs and Startups, it is your turn now as we have relaxed the listing requirements and there is huge potential to raise the much needed capital for investors both local and foreign.” Dayaratne said.
SEC- Director General, Chinthaka Mendis, speaking at the event said SEC can no longer be restricted to its traditional role of market regulation and take the conventional approach to boost the confidence of investors.
“As we know, the country can no longer sustain economic development at the cost of foreign debt. Therefore, Prime Minister, don’t look elsewhere, this is the place to raise capital to fund the ambitious development projects of your government. Moreover, Prime Minister, you can do the same, and can pick the winners from our listed companies by looking at their potential, drive and commitment, secondly, we need to incentivize and nurture such winners. Thirdly, we need to free such winning companies to go out and compete with global giants to make headway in economic development, which would change the whole complexion of our stock market; it will convert us to a dynamic entrepreneurial state,” Mendis said.
Meanwhile, CSE Chairman Dumith Fernando said the launch of complete digitalization of all operations of the Colombo Stock Exchange will enable CSE to operate completely virtually even in a lockdown scenario that Sri Lanka experienced earlier this year.
He said further the launch of New improved CSE and SEC website and new CDS website will further support digitalization by instantly delivering important information to issuers and investors, Fernando noted.
“Our goal is to revitalize the long- term capital mobilization for businesses and enable every citizen o f this country to generate wealth through CSE by providing necessary training and services. With the launch of a new and improved CSE mobile app, users will be able to open an account in the central depository system as well as with stock brokers in a matter of minutes. And they will be able to start trading within an hour .This is groundbreaking. Finally I must say , CSE will do all it takes to fulfill this challenging role thereby assisting capital mobilization which supports the ambitious economic agenda of the government. “I must say for the CSE, the best is yet to come,” Fernando stated.
State Minister of Gem and Jewellery related Industries Lohan Ratwatte, Foreign dignitaries, and representatives from the ministries, CBSL, broker firms also participated in the event.
‘CSE should reach USD 60 bn market capitalization by 2025’
State Minister of Money and Capital Market and State Enterprise, Ajith Nivard Cabraal says it is essential to increase the CSE market capitalization up to USD 60 billion in another five years time to create capacity to provide funding for both public and private sector whilst making sure President’s goal of prosperity will be achieved in a big way.
“In 2014, when President Mahinda Rajapaksa relinquished his office, the market capitalization of CSE was USD 25 billion. Nevertheless, I’m afraid it has come down to half of that or USD 12.5 billion by the end of 2019. We need to grow this market again and make sure our efforts are directed towards making this market expand as well.
Moreover, if the CSE expects the government to come here and use this as a repository of funds, you would be able to cater to their requirement. Nevertheless if you’re with USD 12.5 billion market cap, I don’t think you can do that.
If I may suggest for the next five years, you need to set your goal high at a USD 60 billion market capitalization target. Then you’ll have the capacity to provide funding for both the public and private sector, making sure the President’s goal of prosperity will be achieved,” Minister Cabraal said.
Speaking on Digitalization of the Sri Lankan Stock Market, Minister Cabraal said digitalization would take away from the brokers as well as the market players a lot of paperwork and mundane tasks that have been so far done by them personally.
“When you’re relieved of those duties, I’m sure you will find enough time to make this market work. As you all know, the number of companies that have been traded in this wonderful stock exchange has remained almost stagnant for so many years. So it is also important to take measures to get more companies listed on the stock exchange.
Every time someone asks how many companies are there in the stock exchange, we say 200 or something .Now this 200 or something has been the number for the last 30 years. The next five years we would like to see that number being spoken of as 500 or something. I think you can do that,” Minister Cabraal said.
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