The Colombo Stock Exchange (CSE) and the Maldives Stock Exchange (MSE), in association with the Capital Market Development Authority of Maldives (CMDA), acting under the MOU signed between the two exchanges conducted a roadshow for potential Maldivian issuers and investors. 

The forum, hosted by the Capital Market Development Authority of Maldives, was held on 28and 29March at the Maldives Monetary Authority Building in Male.

The forum presented the CSE as a secondary listing destination for Maldivian companies and promoted the Sri Lankan capital market to investors. The event marked the first Issuer Forum conducted by CSE on foreign soil. 

Over 30 representatives from 20 potential Issuers from the Maldives and seven investment banks from Sri Lanka were present at the event. 

The Issuer Forum comes against the backdrop of a strategic initiative by CSE to introduce a Multi-Currency Board to list and trade companies incorporated and operating outside Sri Lanka. The necessary approvals for the board have been obtained by the Central Bank and the CSE is awaiting approval from the Securities & Exchange Commission of Sri Lanka (SEC). 

Minister of Economic Development in Maldives Mohamed Saeed, CSE Chairman Vajira Kulatilaka, CMDA CEO Ahmed Naseer and MSE CEO Hassan Manik spoke at the event.CSE CEO Rajeeva Bandaranaike made a presentation on the benefits of listing and addressed the common concerns on a public listing by potential issuers while CSE COO Renuke Wijayawardhane made a presentation on listing criteria and requirements.

The Forum also featured a Sri Lankan listed company, where Softlogic Holdings PLC Chairman/MD Ashok Pathirage and Head of Strategy Chintaka Ranasinghe shared the experience of Softlogic Holdings using the Sri Lankan capital market to fund their growth.

Minister of Economic Development Saeedmaking remarks as the Chief Guest at the Issuer Forum commended Sri Lankan listed companies for effective capital market engagement and called on Maldivian companies to embrace the many opportunities available in the Sri Lankan capital market. Minister Saeed also stated that Maldivian companies being strengthened through regional economic cooperation was vital to economic development in the Maldives. 

CSEChairman Kulatilaka said that engaging Maldivian companies had long been an   objective at CSE and that reaching out to them first represented the trust and confidence placed in the Maldives and its business sector.

He stated: “We have recently implemented a number of investment and policy measures to give the exchange world-class status. The CSE offers a unique opportunity to raise capital in one of the fastest growing economies in Asia, through an exchange that on average performed better than most major global indices in recent years.” 

Sharing his thoughts at the panel discussion, CMDACEO Naseer urged Maldivian companies to make use of the opportunity to gain a perspective on investing in the Sri Lankan capital market and to embrace the best practices maintained by listed companies in Sri Lanka. 

MSECEO Manik pointed out that listing on the CSE would provide Maldivian listed companies an opportunity to achieve proper values for their shares. He noted that at present, shares of listed Maldivian companies did not have correct values, which was caused by the lack of liquidity in the market.

Softlogic Holdings Chairman/Managing Director Pathirage noted that sourcing capital was just one benefit of listing on the CSE and outlined that listing also fostered good corporate governance, paved the way for an optimised company structure and helped in growing the organisation through attracting quality talent.  

Commenting on the process of listing foreign companies, CSECEO Bandaranaike noted that initially only non-resident foreign investors would be permitted to buy and sell securities through the proposed Multi-Currency Board.

CSE representatives held one-to-one meetings with companies listed on MSE on 27March.Sri Lankaninvestment banks also had the opportunity to meetthe Maldivian companies that were present at the forum on 28and 29 March.

Shares hit 2-week closing low

Reuters:  Shares closed at a two-week low in thin trade on Tuesday, led by blue chip shares, as concerns over economic growth and rising interest rates weighed on sentiment ahead of a decision on interest rates by the Central Bank.

The Central Bank of Sri Lanka is expected to raise key interest rates by at least 25 basis points late on Tuesday, a Thomson Reuters poll showed, as it seeks to reduce downward pressure on the fragile local currency LKR=LK. 

The benchmark share index .CSE ended 0.5 %, or 30.20 points, weaker at 6,031.85, its lowest close since 16 March.

“There are no positive catalysts to push the market up. The index will come down further with foreign investors exiting intermittently and the expectation of further rate hike,” said SC Securities Ltd Head of Research Yohan Samarakkody.

Rising debt, ratings downgrade and outlook revisions by rating agencies, slowing economic growth, a widening fiscal deficit, looming balance of payments crisis, and changes in budget proposals have dented investor sentiment, analysts said.

Rising yields on treasury bills following an unexpected rate hike by the Central Bank in mid-February have spurred investor appetite for fixed interest rate-bearing assets, dealers said.

Yields on t-bills are hovering near 29-month highs after jumping between 116 and 195 basis points since the Central Bank raised key policy rates by 50 basis points from a record low on 19 February.

Shares in conglomerate John Keells Holdings Plc JKH.CM fell 1.7 %, while Distilleries Company of Sri Lanka Plc DIST.CM fell 2 %.

Turnover was Rs. 273.6 million ($1.85 million), its lowest since 11 February and around a third of this year’s daily average of Rs. 774.9 million.

Foreign investors bought a net Rs. 52.8 million worth of shares on Tuesday, but they have been net sellers of Rs. 2.06 billion worth shares so far this year.

Emerging market March inflows rise to 21-month highs: IIF

Reuters: Foreigners are estimated to have pumped $36.8 billion into emerging market stocks and bonds in March, the highest monthly inflow in nearly two years, the Institute of International Finance said on Tuesday.

The Washington-based body, one of the most authoritative trackers of foreign capital flows to and from the developing world, said in a note that all four emerging market regions had received inflows, with Asia topping the list with $20.6 billion.

The inflow, the highest since June 2014, follows $5.4 billion received in February and is substantially above the 2010-2014 average of $22 billion, the IIF said. Bonds took in $18.9 billion and equities $17.9 billion, the data showed.

Latin America, which had been shunned by investors in recent months, took in $13.4 billion, the data showed, with equities in crisis-hit Brazil receiving over $2 billion “helped by attractive valuations and rising hopes for political change”.

But the inflow surge may have ground to a halt, the group said, predicting that going could get tougher in coming weeks as expectations again grow for the U.S. Federal Reserve to raise interest rates a couple of times in 2016.

“In the absence of much improvement in the fundamental economic outlook for EMs, it appears that March’s surge in flows to EMs was mainly due to a global risk-on shift in investor behaviour and lower mature market interest rates, supported by surprisingly dovish signals from the (Fed) on 16 March,” the note said.

The IIF also revised data for previous months, and now estimates that emerging bonds saw outflows of $8.8 billion in January rather than inflows of $4.3 billion. February debt inflows were revised upwards to $5.2 billion from $0.9 billion.

Equity flow numbers were changed for February to $0.2 billion inflow from a $1.1 billion outflow, while January outflows stand at $7.5 billion from the previous $6.9 billion.