Three firms have de-listed and one is pending from the Colombo Stock Exchange (CSE), raising issues as to whether CSE is becoming increasingly 'unattractive'. "From a CSE perspective this is not a good move," an industry analyst noted. Associated Motorways (AMW) and Associated Electricals Company (AEC) – (both firms in which the De Zoysa family figure prominently) together with Commercial Leasing have been de-listed during this year. Associated Property Development Ltd (APDL), the holding company of AEC will be de-listed shortly and the company announced this on March 26.
“This shows that CSE may have become an unattractive, cumbersome and weighty disposition to be in,” a stockbroker noted.
However, CSE sources noted that APDL, AMW and AEC de-listed after AMW was bought by the Gulf-based Al-Futtaim Group. “The Al-Futtaim investors did not want to be listed,” a CSE source said, adding that the company preferred to be a non-listed company where there is no need to make disclosures and comply with other CSE requirements.
AMW’s 71 % controlling stake held by AEC was sold in July to the Al- Futtaim Group. "Before de-listing AMW had Rs. 9.7 billion market capitalization, which ranks within the top 20 market capitalized firms. Hemas has the same capitalization, while LIOC has Rs. 9.1 billion. De-listing in the current scenario is a resounding 'no', but all those firms decided there was no real advantage in being listed when only less than 10% was listed," a broker noted.
Most of the businesses go public when they want to obtain some additional resources to finance their activities and projects. “Additionally, if you have some innovative and potentially profitable business initiative but you lack the resources to realize it, then going public is one of the possibilities you can consider. In this way you will gain money to acquire the necessary equipment and other factors you need for the execution of the business. But these firms apparently did not have any need for that,” the broker said. |
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