• Chairman Dilshan Wirasekara says investors might move to asset class with no haircut
• Notes CSE ready to accommodate SOE listing
• Confirms making slight tweaks to listing framework

If the Government of Sri Lanka decides to proceed with restructuring domestic debt, the Colombo Stock Exchange (CSE) would be one of the entities that will benefit from the move, according to statements made by CSE Chairman Dilshan Wirasekara at an event held in Colombo on Wednesday evening (11). 

Wirasekara, responding to a query raised by a journalist, stated that if domestic debt restructuring were to happen, it would be “slightly positive” for the market, as investors would be looking for asset classes with no haircuts.

Even though talks of domestic debt restructuring are intensifying, the Government of Sri Lanka is yet to take a final decision on the issue. 

Speaking about the Government’s plans to establish a new holding company to manage shares of State-owned enterprises (SOEs), Wirasekara noted that the CSE is in the process of broadening the listing framework to accommodate SOEs in the stock market.

“We are broadening the framework with a little bit of tweaking here and there, as the existing framework might not support SOE listings. Whetherthe Government will use this amended framework or not is its decision,” he added. 

Further, highlighting the market success stories of Sri Lanka Telecom (SLT) and Distilleries Company of Sri Lanka (DCSL), where shares of the companies were sold to the public, Wirasekara noted that the CSE is the best platform currently available for SOEs, as it provides investor confidence despite uncertainties. 

The Sunday Morning last week reported that a new holding company is to be set up this month to hold shares of SOEs that are to be reformed or privatised.

“A holding company will be set up to hold the shares of these institutions. It will be formed in the second week of this month (January),” President Ranil Wickremesinghe told The Sunday Morning. 

President Wickremesinghe stated that one of the key concerns of those providing financial assistance to Sri Lanka was that funds provided to the country should not be used to fund losses. “They (donors) want the funds to be utilised in the health and food manufacturing (agriculture) sectors. Therefore, the Government cannot proceed with loss-making enterprises,” he said.