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By Chandani Jayatilleke

The proposed listings of three major companies Sri Lanka Telecom, Apollo Hospitals and Tess Agro on the Colombo Stock Market in November are expected to enhance the image of the bourse with increased market capitalisation.

The three companies will issue Initial Public Offerings (IPOs): Sri Lanka Telecom (SLT) - Rs. 4 to 5 billion, Apollo Hospitals - Rs. 307.5 million and Tess Agro - Rs. 25 million.

Stock market experts said that the issues will have a very positive impact on the stock market.

"One of the objectives of the listing is to increase market capitalisation and liquidity which will encourage more companies to seek listing. Therefore we welcome the proposed listings," Director General Colombo Stock Exchange, Hiran Mendis said.

He said that what is barring the CSE entering the Morgan Stanley Price Index listing is its low market capitalisation level.

"These three IPO openings, the Telecom in particular will bring international recognition to the Colombo bourse and it's a welcome move," he said.

Chairman of the Stock Brokers' Association, Deva Ellepola said that the Colombo market was starving for some good IPOs. They will add more value to the market capitalisation and growth in telecom, health and agriculture sectors.

In particular the Telecom IPO will also encourage other telecommunication companies to go public. The timing of the IPOs is also favourable considering improved company performances reported during the last nine months.

As far as the investors are concerned the issues will be attractive. The Telecom IPO can be used as a catalyst to bring back active investors and attract new investors. However, the pricing of the issue has to be right, he said adding that it should not be used as a Government divestiture, Ellepola said.

The Apollo issue will bring a new dimension to the health sector in the country. "Apollo being an internationally recognised hospital chain, it will certainly create a positive impact on the Colombo bourse. The internationally recognised brand names are important in the stock market, he said.

The Apollo funds will be utilised to part finance the purchase of the latest state-of-the-art medical equipment and increase the number of rooms to 550 from present 350.

Tess Agro is another encouraging IPO as it is a medium size company. This an encouragement to other medium size companies, he said. Tess Agro plans to expand the company's operations in an effort to make Sri Lanka self-sufficient in fish.

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