Huge boom in capital market

Major IPOs coming in second half :

Anjana Samarasinghe

Many companies in manufacturing, education, engineering and leisure are now willing to get listed in the Colombo Stock Exchange, a capital market expert said.

Deputy Director, Corporate Advisory and Capital Market, Merchant Bank of Sri Lanka A.M.A Cader said companies in manufacturing, education, engineering and leisure sectors are willing to get listed in the Colombo Stock Exchange to raise funds through the capital market for their business expansions.

“We are in the second half of the 2011 and we expect around 10 to 15 Initial Public Offerings (IPOs) and out of that over five will be major IPOs,” he said.

With tax reductions that came into effect in April there will be significant increases in the corporate earnings of listed firms and analysts expect a huge boom in the Colombo Stock Exchange. “Most of the listed firms have already released their quarterly and annual results which shows noteworthy improvements in their performance. Today the CSE has become a lucrative market and more companies are willing to get listed in the CSE,” he said.

Due to the market improvement and tax incentives in the manufacturing industry more companies are seeking stock market listings to reap benefits of the capital market.

The education sector in the country is thriving and with the opening of the private sector universities the country can expect a bounce in the industry. Sri Lanka maintains high standards in the education industry where industrialists see more opportunities to grow,” Cader said.

Leisure sector companies which are already listed in the CSE raised funds through rights issues to fund their future expansions. With the surge of tourist arrivals and the liberalization of North and East other companies too seek capital for expansion, raising funds through the capital market is an ideal solution for them. The engineering sector has also shown growth momentum with the economic expansion in the country.