S&P Rating after SriLankan Airlines restructuring: CB Governor
The S&P rating upgrade will be completed after the SriLankan Airlines restructuring, Dr. Nandalal Weerasinghe, Governor Central Bank (CB) said at an investor forum on Thursday.
He said that single borrower limits for corporate coming into force will compel banks to diversity their exposures. This will force them to diversify funds into the capital market, he added.
The Sri Lankan capital market also needs large State-Owned Enterprises (SOEs) to list in the stock exchange, he noted, saying that raising capital in this method is the right way to go for SOEs.
There is a potential for regulated capital market products for the general public, he also noted adding that this type of products will attract the public and stop them from getting duped by scammers promising high yielding products
Sri Lanka could gain market access in two years, but the decision to use commercial funding to finance the deficit is a separate matter, according to Dr. Weerasinghe. Once the country’s rating returns to B grade, market access is crucial, but the government must decide whether to raise capital markets. Sri Lanka is receiving multilateral funds and managing state finances to narrow budget deficits, allowing most to be financed locally. There are opportunities for debt for nature swaps and sustainable financing. However, Dr. Weerasinghe believes that without a specific need, Sri Lanka should not raise commercial debt. The country’s restructured sovereign bonds are trading around 6 per cent, and bond sales are projected for 2027 and 2028. Access to capital markets helps roll-over debt, allowing domestic interest rates to be kept lower.
Agreeing that the public money should not be wasted, Deputy Minister of Economic Development Anil Jayantha Fernando said that there is a committee studying the SOEs and how best to deal with them. “We are looking at how best the SOEs can contribute to the market efficiency.”
In the case of SriLankan Airlines, he said, there are multiple options such as selling an asset, privatisation, changing the management, amalgamating with another entity etc. Sri Lanka has multiple options for reforming SOEs, with no predetermined model at present, according to Dr. Fernando. The government does not believe in solely profit-making, and state agencies will play a role in the market where necessary. The Colombo Stock Exchange has a catalyst board that can accommodate state enterprises, and the SOEs will decide whether to use this tool as a research mechanism or something else.
On listing SOEs, Dr. Hareendra Dissabandara, Chairman Securities and Exchange Commission (SEC) noted that the Catalyst Board is ready whenever the SOEs are ready. “Any state enterprise can raise capital through the Catalyst Board, but they need to fulfil some criteria.” Going forward, he noted that digitalisation and demutualisation are the most important criteria of the capital market. “We need to digitise most of our platforms and create digital assets.”
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!