Firms delay listing

Around five firms who wanted to list in the Colombo Stock Exchange (CSE) have put their plans on hold due to the prevailing interest rate hike, according to a Securities and Exchange Commission (SEC) source.

“When listing in the CSE, they need to account for the risk factor for equity and due to high interest rates in the country they are holding on,” he told The Sunday Times FT.

He said that when the risk free rate of return which is normally determined by the Treasury bill rate is high, the investors also expect returns from the equity investment to be as high. “But in a rising cost scenario, such a situation is not possible and these companies who were to list in the CSE through IPOs are holding on,” he said.