Govt. keen on more new companies in the stock market
Stock-market stakeholders in Sri Lanka were confronted with a challenge by Treasury Secretary Dr. P.B. Jayasundera on Tuesday: For every new large company that seeks a listing, the Government will match it with the listing of a large stake entity.
The Treasury Secretary gave this assurance to the capital market industry stakeholders at a meeting to discuss their budget proposals. Similarly for a small company that they help list in the stock exchange), he was quoted by brokers who were present as saying that he’ll bring in small entities like Salu Sala. They said that a proposal to grant tax incentives for new firms planning to list was also discussed. “He said that his main grouse was that the industry was asking ‘trivial’ things (which can be implemented) but he was adamant that they come out with some major proposals which will see large capital inflows into the country,” a CEO of a stockbroking company said.
This meeting was held under the aegis of the National Council for Economic Development. The Securities and Exchange Commission (SEC) had a presentation consisting proposals which ranged from a demutualised stock exchange, expediting the amendments to the SEC Act; expediting implementing Risk Management System, Central Counter Party, Delivery versus Payments system, etc., developing the corporate debt market, listing large public and private companies, developing infrastructure including back office functions, etc.
The Colombo Stock Brokers Association submitted proposals requesting to remove the current withholding tax from listed corporate debt such as debentures. “This will encourage more participation in trading debentures and also push firms to introduce debentures,” a stockbroker told the Business Times.
The Margin Trading Association wanted the 0.5 per cent stamp duty to be removed from transactions from normal share trading accounts to margin trading accounts.
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