Tue, 23 Apr 2024
09:55:58
Listing Benefits:
11 Oct 2013
19:24:54
Listing on CSE Boost Growth, Industry Leaders Say
Oct 11, 2013 (SLBO) - Listing a company with the Colombo Stock Exchange (CSE) can provide the boost a fast‐growing company needs, several industry leaders said in a wide ranging panel discussion at the Issuer Relations Forum held at the Cinnamon Grand last Friday (11).
Market capitalisation of the CSE amounts to less than 30% of Sri Lanka's annual GDP, the Chairman of CSE Krishan Balendra revealed. In comparison, the total value of the stock exchanges in the region as compared to GDP amounted to as much as 180% on average, with exchanges in countries like Malaysia and Singapore exceeding 200% of their annual country's GDP. As such the forum aimed to engage and encourage companies to list on the CSE, while addressing the concerns they voiced, Balendra added.
Representatives from top firms such as the Akbar Brothers, Allianz Insurance Lanka Limited, Asian Hotels and Properties, Amana Bank, Ceylon Biscuits Ltd, Brandix Lanka, Hameedia Stores, Jetwing Hotels, Richard Pieris, Softlogic Retail and the Tudawe Brothers attended the event.
Panelist and CEO of Peoples Leasing and Finance PLC, D P Kumarage explained that the company experienced strong growth from the outset‐ as much as 120%. Eventually, the company needed to enter a new growth phase without imbalancing their debt‐equity ratio, and listing on the CSE provided the perfect springboard propelling them towards further growth.
At the same time, Chairman of Laugfs Holdings plc, W K H Wegapitiya said that far too many home‐grown companies entered a “Bermuda triangle” when it came to the growth momentum phase. Laugfs on the other hand wanted to ensure sustainable growth by broad‐basing their ownership. Currently, Wegapitiya said that Laugfs was planning to list five more companies on the CSE, adding that it was the perfect time to do so.
Wegapitiya discussed various “myths” which exist in the market when listing on the CSE, including giving up control of the company, as well as the need to disclose everything about the way the company is run. On the former myth CEO of ODEL Otara Gunawardene also weighed in, explaining that while it had been a difficult decision, listing had ultimately been for the benefit of the company. Not only were there not too many changes made, but it was also a faster, cleaner process in terms of valuation, giving ODEL the room to grow from strength to strength.
Disclosures too were limited and there was no need to give away trade secrets, the panelists emphasised.
However, all the panelists agreed that some preparation needed to be done before listing a company on the CSE, from streamlining systems and processes to changing the culture of the company.
These challenges were overcome with the help of several organisations who lent a helping hand. Moreover, each of these companies subsequently was able to grow at a much faster rate than if they had decided not to list.
Assistant General Manager of Regulatory Affairs at CSE, Renuke Wijayawardhane gave a presentation on listing on the CSE. Wijayawardhane revealed that this year has seen as much as Rs. 30 billion raised by debt issuers, adding that market capitalisation has doubled since 2009, showing that there is huge potential for growth.
Companies which successfully listed could raise long term funds, especially if they were looking to fund further growth without raising their debts. In addition, listed companies could tap into a huge investor base, and would no longer be limited by the owner's capacity to introduce capital, Wijayawardhane pointed out. Apart from this, the company's corporate profile would be enhanced, with plenty of publicity along with the publication of financial statements. Listed companies are also usually valued higher compared to unlisted companies.
He also elaborated on important factors to consider by potential issuers before deciding on listing on the CSE.
The Diri Savi Board opened up new opportunities for smaller companies looking to list with less ornerous requirements. Companies needed stated capital of Rs. 100 million, a one year record of operations and positive net assets for the last financial year as well as a public float of 10%, Wijayawardhane said.
Consulting with an investment bank before approaching the CSE would make the process much easier and faster, Wijayawardhane said. It is equally important to attract long term investors rather than retail investors as this could introduce volatility, he added.
In the meantime, Chairman of the Securities Exchange Commission Dr. Nalaka Godahewa announced in his keynote address that it was once more possible to list on the stock exchange by way of an alternative method known as an “Introduction” where companies were able to list on the CSE without having an initial public offering at the time of listing, subject to certain controls.
Market capitalisation of the CSE amounts to less than 30% of Sri Lanka's annual GDP, the Chairman of CSE Krishan Balendra revealed. In comparison, the total value of the stock exchanges in the region as compared to GDP amounted to as much as 180% on average, with exchanges in countries like Malaysia and Singapore exceeding 200% of their annual country's GDP. As such the forum aimed to engage and encourage companies to list on the CSE, while addressing the concerns they voiced, Balendra added.
Representatives from top firms such as the Akbar Brothers, Allianz Insurance Lanka Limited, Asian Hotels and Properties, Amana Bank, Ceylon Biscuits Ltd, Brandix Lanka, Hameedia Stores, Jetwing Hotels, Richard Pieris, Softlogic Retail and the Tudawe Brothers attended the event.
Panelist and CEO of Peoples Leasing and Finance PLC, D P Kumarage explained that the company experienced strong growth from the outset‐ as much as 120%. Eventually, the company needed to enter a new growth phase without imbalancing their debt‐equity ratio, and listing on the CSE provided the perfect springboard propelling them towards further growth.
At the same time, Chairman of Laugfs Holdings plc, W K H Wegapitiya said that far too many home‐grown companies entered a “Bermuda triangle” when it came to the growth momentum phase. Laugfs on the other hand wanted to ensure sustainable growth by broad‐basing their ownership. Currently, Wegapitiya said that Laugfs was planning to list five more companies on the CSE, adding that it was the perfect time to do so.
Wegapitiya discussed various “myths” which exist in the market when listing on the CSE, including giving up control of the company, as well as the need to disclose everything about the way the company is run. On the former myth CEO of ODEL Otara Gunawardene also weighed in, explaining that while it had been a difficult decision, listing had ultimately been for the benefit of the company. Not only were there not too many changes made, but it was also a faster, cleaner process in terms of valuation, giving ODEL the room to grow from strength to strength.
Disclosures too were limited and there was no need to give away trade secrets, the panelists emphasised.
However, all the panelists agreed that some preparation needed to be done before listing a company on the CSE, from streamlining systems and processes to changing the culture of the company.
These challenges were overcome with the help of several organisations who lent a helping hand. Moreover, each of these companies subsequently was able to grow at a much faster rate than if they had decided not to list.
Assistant General Manager of Regulatory Affairs at CSE, Renuke Wijayawardhane gave a presentation on listing on the CSE. Wijayawardhane revealed that this year has seen as much as Rs. 30 billion raised by debt issuers, adding that market capitalisation has doubled since 2009, showing that there is huge potential for growth.
Companies which successfully listed could raise long term funds, especially if they were looking to fund further growth without raising their debts. In addition, listed companies could tap into a huge investor base, and would no longer be limited by the owner's capacity to introduce capital, Wijayawardhane pointed out. Apart from this, the company's corporate profile would be enhanced, with plenty of publicity along with the publication of financial statements. Listed companies are also usually valued higher compared to unlisted companies.
He also elaborated on important factors to consider by potential issuers before deciding on listing on the CSE.
The Diri Savi Board opened up new opportunities for smaller companies looking to list with less ornerous requirements. Companies needed stated capital of Rs. 100 million, a one year record of operations and positive net assets for the last financial year as well as a public float of 10%, Wijayawardhane said.
Consulting with an investment bank before approaching the CSE would make the process much easier and faster, Wijayawardhane said. It is equally important to attract long term investors rather than retail investors as this could introduce volatility, he added.
In the meantime, Chairman of the Securities Exchange Commission Dr. Nalaka Godahewa announced in his keynote address that it was once more possible to list on the stock exchange by way of an alternative method known as an “Introduction” where companies were able to list on the CSE without having an initial public offering at the time of listing, subject to certain controls.
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