CSE urges Govt. to list major SOEs
View(s):The Colombo Stock Exchange (CSE) is urging the government to go public with large state-owned enterprises (SOE)s such as the Sri Lanka Insurance Corporation (SLIC) and state banks, officials said.
“We are requesting the government to go public with these state institutions and the pension funds – Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF),” an official said, explaining that the CSE will present a budget proposal to back its request. He said the proposal calls for 10 per cent of these entities to be listed on the CSE.
This comes on the back of the Insurance Association of Sri Lanka (IASL) writing to the Insurance Board of Sri Lanka (IBSL) in March where concerns were raised on SLIC being exempted from splitting into life and general sections and subsequent listing (as required by law). (This story is reported elsewhere in this paper).
The CSE in this backdrop is gearing to introduce a State-Owned Enterprises (SOE) board as well. “The CSE is also working to re-brand both boards (Diri Savi and the main board) and grant greater opportunities to SMEs and BOI companies,” the official said, adding that consultations with the investment banks and listed companies have already been carried out and the CSE is now speaking to other stakeholders and will soon be seeking regulator approval.
Industry analysts constantly point out that the lack of market liquidity has been a negative factor in attracting foreign investors to Sri Lanka’s capital market. “The government represents the lion’s share of our economy, controlling banking, insurance, port, aviation, transport, gas sectors. So, it is better to list at least 10 to 20 per cent of the government’s profit-making entities,” an analyst said.
State owned commercial banks, SLIC and Litro Gas are the likely SOE candidates to get listed first, according to officials.