Lankan economy reaches US $ 20 b GDP milestone

Hiran H. Senewiratne

GDP: The economy of Sri Lanka reached the milestone of crossing the US $1000 per capita income or US$ 20 billion in Gross Domestic Product.

Sri Lanka is the first country in the South Asian region to reach this milestone, the Securities and Exchange Commission of Sri Lanka (SEC) annual report indicated. Therefore, the performance of the CSE picked up momentum during the last quarter of the year, which lasted up to November 2005.

Thereafter the market turned somewhat bearish, but with the confidence gained due to peace initiative the market has since stabilised, its annual report said.

During the year under review there were two Initial Public Offerings (IPO). The Dialog Telekom IPO substantially enhances market capitalisation of the Colombo Stock Exchange (CSE). Dialog subsequently has become the first billion-dollar market capitalised company in the CSE. The introduction of negotiated brokerage fees in 2005 for trades over Rs 100 million is also a positive step taken towards developing the market.

In pursuit of market development endeavours it has signed a MoU with the Central Bank of Sri Lanka to introduce the DEX system to activate the secondary market for Government securities. Currently, the debt market in Sri Lanka has not reached the levels expected and therefore several initiatives are underway to activate the segment, the annual report revealed.

Further the revision of the Take-over and Mergers Code has continued during the year to address certain ambiguities in the application of the code. CSE also initiated the regulation of market intermediaries registered with SEC in the categories of Margin providers, Investment Managers, Underwriters, Clearing Houses and Credit Rating Agencies.

Further its Secretariat has also developed a three-year Corporate Plan for the period 2006 through 2008. The Corporate Plan re-examined all internal processes, resource requirements, policies and procedures.