New CSE board to attract Maldivian firms
Finally, the Colombo Stock Exchange (CSE) is to launch its first proposed Multi Currency Board and that, within three months.
The introduction of dual currency trading and settlement of foreign currency denominated securities will allow foreign firms to trade on the CSE. But as was proposed earlier, this board will not be solely a dollar denominated board, Renuke Wijayawardhane, Chief Operations Officer CSE told the media adding that strong currencies including Chinese Yuan, etc will be allowed along with US dollars.
This initiative is intended to increase the attractiveness of CSE’s trading platform by potentially boosting trading and enhancing liquidity in foreign currency denominated securities listed on this new board, he said.
Last year the CSE entered into a Memorandum of Understanding (MoU) with the Maldives Stock Exchange to introduce CSE securities and a CSE team trained their Maldivian counterparts recently on (Maldivian firms) going public on this special CSE board along with different aspects on clearing, trading and settlement, Mr. Wijayawardhane said. Some Maldivian firms are almost ready to come on board, he added.
The CSE obtained exchange control approval to list foreign companies in the CSE in April last year.
A foreign company that seeks a listing in this multi currency board has to be first listed in the stock market of that country, Mr. Wijayawardhane added noting that it’ll be a cross listing of shares – which is when a firm lists its equity shares on one or more foreign stock exchange in addition to its domestic exchange. Cross listing gives issuing companies more liquidity and a greater ability to raise capital. Initially only non residents will be allowed to trade on shares on the multi currency board.