MAS Holdings, Brandix, Maliban and Munchee urged to go public on the Lankan bourse
Sri Lanka’s garment giants, MAS Holdings and Brandix along with top biscuit brands – Munchee and Maliban are among some 150 private companies being urged to go public and list in the Colombo Stock Exchange.
These companies along with Tudawe Brothers, Hirdaramani’s, Finco Group’s ICC and Sanken Lanka, among others, have been invited to a top forum next month aimed at attracting companies to go public.
The meeting called the ‘issuers forum’ is being organized by the Colombo Stock Exchange (CSE) and the Securities and Exchange Commission (SEC) to tap companies that have the potential to list on the CSE, according to SEC sources.
“They have identified the firms and have sent invitations to them,” one source told the Business Times. He said about 150 firms have been invited. “This is done in a bid to increase the liquidity in the CSE,” he said.
He added that the SEC and the CSE have met many private companies and have had discussions with them.
He said that they met the managements of these firms and enlightened them on the benefits of going public and that a similar attempt will be exercised next month at the issuers’ forum.
The financial gain in the form of raising capital is the most distinct advantage of a company going public. Capital can be used to fund research and development, fund capital expenditure or even used to pay off existing debt. Going public provides a company with equity financing opportunities to grow its business – from expansion of operations to acquisitions.
The CSE saw 17 firms list in the market last year, lower however from 29 firms in 2011.
The SEC is also exploring possibilities of bringing in a minimum free float requirement, the source said. He said that this emerged at the “Invest Sri Lanka”Investor Forum which was held in Hong Kong on Monday, showcasing the economic growth prospects and investment opportunities in Sri Lanka’s capital market.
CSE Chairman Krishan Balendra, said in Hong Kong that the rules have been drafted and that they are currently obtaining stakeholders’ comments on the new set of rules. “We expect these minimum free float rules to be brought in, in the next six months,” he said.
Mr. Balendra said that the CSE’s market cap is low, at US$19 billion and that it is also low relative to the economy, and at 30 per cent of GDP is significantly lower than other markets in the region. The Hong Kong meeting attracted over a 100 participants, including institutional and high net worth investors, and fund managers. Eleven leading listed companies from Sri Lanka namely John Keells Holdings, Commercial Bank of Ceylon, DFCC Bank, Distilleries Company of Sri Lanka, Nations Trust Bank, Dialog Axiata, Hayley’s, Ceylinco Insurance, Access Engineering, People’s Leasing & Finance, and Tokyo Cement Company (Lanka) participated at this event.
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