CSE losing shine on big market caps
The delisting procedure of two large conglomerates within the space of five months has got the Colombo share market talking.
Nestle Lanka PLC and Expo Lanka PLC, two companies with some of the largest market caps in the Colombo Stock Exchange (CSE), were recently delisted. The bottomline remains that these companies don’t see enough value to be listed on the CSE. Stock market analysts noted that delisting shows that these companies don’t find any benefits in being listed on the exchange. “This does not send a good message to the market, which is concerning. When the CSE is trying to attract more companies to go public and list on the exchange, two of the biggest companies have resorted to delisting from the exchange,” one analyst noted. A second analyst said that while the companies have not mentioned in black and white that there isn’t any value in being listed, the underlying statement is a tough one. “Indeed, they have not worded it so bluntly, but the question remains.”
On the issue of whether the two companies found it worthwhile to list on the stock exchange, Rajeeva Bandaranaike, CEO, CSE defended the stock exchange and said that one cannot generalise and say that there is no value in being listed in Colombo. “The two companies in question had their reasons to delist.” He believed that Nestle may have delisted because of a decision taken at a global level. “It may have not made sense for them to be listed in markets where they did not raise any capital.”
He added that delisting for Expolanka was as much of their operations are overseas and they may have found it more viable to raise capital in dollars in markets they operate in. While these valid points remain, one must not take it lightly that two of the stars in the CSE have left.
Meanwhile, in accordance with the provisions of the Companies Act, No. 07 of 2007, Expolanka’s name has been changed from ‘Expolanka Holdings PLC’ to ‘Expolanka Holdings Ltd’.
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