Treasury wants large corporates to list in Stock Exchange

Vishmi Wijeratne

The Treasury is prepared to take the initiative if it would act as an incentive in bringing in large corporates into the Stock Exchange. Deputy Secretary to the Treasury, Dr. Batagoda told Daily News Business last Thursday in the sidelines of a press conference held by the European Chamber of Commerce of Sri Lanka (ECCSL) that 16 companies came forward and listed themselves in the stock market this year.

“At present there are 285 companies listed this year when compared to last year's 272 companies, is an improvement. However the momentum of growth is not up to the standard as we hoped,” he said.

He also said that though 60 % of the stock listing belongs to the private sector, this doesn't include the larger corporates that can contribute more to the equity market.

“The government's policy is to promote the equity market, thus we have given anything the private sector has asked, including tax concessions and many other leverages. ”

According to Batagoda, government bodies contribute only 6 % of the equity market. “The private sector asks us to contribute more but at present we don't want to use government money in the equity market as we need it for other regulatory matter instead, we use the EPF for investment purposes as we need to build a strong equity market,” he said.

Batagoda also said that presently national investment is around 30 % and savings are at 22 %. “To bridge this gap we have two options to either borrow from the private sector or gain more from foreign investments,” he said. He said that since the private sector contribution is poor they have to look at foreign investments. “Thus we plan on opening the treasury bonds to attract foreign investment.”

When asked why priority is given on EPF funds to buy shares and increase investment in the capital market of a bigger correspondence, he said, “the only reason this happens is due to larger corporates being reluctant to invest. ”

He also said that the Treasury plans on bringing the public debt ratio to around 72 % next year from the present 80 % and will bring the budget deficit to around 5 % from the present 10 % by next year.