Tokyo Stock Exchange mulls listing of Sri Lankan corporates

Wednesday, 12 September 2012 01:04 - - {{hitsCtrl.values.hits}}

The Tokyo Stock Exchange (TSE), which is the third largest equity/stock market in the world with a total market capitalisation of US$ 3.3 trillion, has expressed interest to have Sri Lankan listed corporates on the Colombo Stock Exchange (CSE) to be listed on the TSE as Japanese Depository Receipts (JDRs), stated Ambassador of Sri Lanka to Japan Admiral (Rtd.) Wasantha Karannagoda.

Listing of foreign corporates in the TSE as JDRs is customary since the foreign corporates are already listed in their home countries.

According to Ambassador Karannagoda, this is an opportune point of time to have Sri Lankan listed corporates listed in the global TSE market since the TSE is in the process of merging with the Osaka Stock Exchange (OSE).

This mega integration of these two mega markets, i.e. TSE and OSE, would reinvigorate the Japanese equity market, thus benefitting corporates and investors alike.

Senior officials of the TSE have conducted discussions with the relevant officials of the Embassy of Sri Lanka in Tokyo in this context. For all purposes, the listing of Sri Lankan corporates in the TSE would enable the Sri Lankan corporates to tap and to raise funds from external (international) sources, money centre banks and markets.

Ambassador Admiral Karannagoda added that once a Sri Lankan corporate is listed in a major global exchange such as the TSE, it would obviously raise its profile and stature not only on a regional basis but also on a global basis.

Further, listing Sri Lankan corporates on other major markets/exchanges such as the New York Stock Exchange (NYSE), London Stock Exchange (LSE) or the NASDAQ of the US is a long and arduous process, let alone the cost of listing. Accordingly, the listing on the TSE is less difficult and less costly and the process is less arduous.

The Colombo Stock Exchange (CSE) was among the best performing three markets in the world from 2009 to 2011. Further, the CSE is fuelled, mostly, not only by the domestic investors but by foreign investors.

The TSE has noted that the fundamentals and the technical factors of the listed companies of the CSE are generally more stable than that of many other markets in both developed and developing nations. The Price Earnings Ratio (P/E) of the CSE is an impressive number, of around 13. It is surprising that despite a number of large blue chip corporates being listed on the CSE, not a single company is listed on any major global exchange.

According to Ambassador Admiral Karannagoda, the listing of Sri Lankan corporates in the TSE would make them more globalised and more connected, thus enabling them to compete and vie with other similar corporates in the region as well as in the world.

“For all purposes, the keen interest expressed by the TSE in corporates on the CSE augurs well for the performance of the CSE as well as the economy of the country,” the Ambassador added.