Colombo Stock Exchange

The Colombo Stock Exchange (CSE) (Sinhala: කොළඹ කොටස් වෙළඳපොල, romanized: Kolamba kotas velandapola; Tamil: கொழும்பு பங்கு பரிவர்த்தனை) is the main stock exchange in Sri Lanka. It provides an electronic trading platform. The headquarters of the CSE have been located at the World Trade Center (Colombo) Towers in Colombo since 1995, and it also has branches across the country in Kandy, Jaffna, Negombo, Matara, Kurunegala, Anuradhapura and Ratnapura.[2] The Colombo Stock Exchange (CSE) has 296 companies representing 20 business sectors. As of 25 January 2021, with a Market Capitalization of Rs. 3,699 Billion.[1]

Colombo Stock Exchange
කොළඹ කොටස් වෙළඳපොල
கொழும்பு பங்கு பரிவர்த்தனை
CSE logo
TypeStock Exchange
LocationColombo, Sri Lanka
Founded1896; 125 years ago (1896) (as Share Brokers Association)
1985; 36 years ago (1985) (as Colombo Stock Exchange)
Key peopleDumith Fernando (Chairman)
Rajiva Bandaranaike (CEO)
CurrencyLKR
No. of listings289 companies representing 19 business sectors (as at 31 October 2021)
Market capIncrease Rs 4,997 billion (2021)[1]
IndicesAll Share Price Index (ASPI)
S&P Sri Lanka 20 Index (S&P SL20)
Websitewww.cse.lk

On 1 September 2021, turnover surpassed 14 billion and the All Share Price Index surpassed 9000 points for the first time in CSE history when the ASPI was closed at an all time record high at 9,163.13 points.[3][4][5]

HistoryEdit

Share trading in Sri Lanka was initiated in 1896 under the Share Brokers Association (SBA). In 1904 SBA was renamed as Colombo Brokers' Association. They started auctioning shares in open land. The Stock Brokers Association became a competitor, only to later combine with Colombo Brokers to form the Colombo Securities Exchange in 1985.

The establishment of a formal stock exchange took place in 1985 with the incorporation of the Colombo Stock Exchange (CSE), which took over the Stock Market from the Colombo Share Brokers Association. It currently has a membership of 15 institutions, all of which are licensed to operate as stockbrokers.[3]

The company was renamed the Colombo Stock Exchange in 1990. The CSE introduced the Central Depository System, which automated clearing. The CSE headquarters opened in Colombo's WTC in 1995.[3]

Milanka Price Index was introduced in 1999 and several branches were opened within the country. The regional branches include Kandy, Jaffna, Anuradhapura, Kurunegala, Matara, Ratnapura and Ambalantota. https://www.cse.lk/corporate

Post ceasefire agreement boomEdit

After witnessing mediocre performance throughout the 1990s mainly due to the Sri Lankan Civil War, the ceasefire agreement signed in 2001 saw unprecedented growth in both indices of the CSE. The All Share Price Index, which was hovering around the 500 mark in August 2001, has since surpassed the 2000 mark.[citation needed]

This led CSE to be consistently dubbed as one of the best-performing markets in the world. As of 2005, the CSE had recorded a consistent annual growth of over 30% in the All Share Price Index (ASPI) for the previous three years. It surpassed that in 2006, with the ASPI growing by 41.6%,[6] and the MPI growing by 51.4%[7] during the calendar year. CSE recorded the highest point in history on 26 February 2007. Milanka Price Index (MPI) reached 4,214.8 points on that day.[8]

Buoyed by improved investor confidence due to positive political developments and strong corporate results[6] the CSE continued to achieve strong growth in 2007, as the ASPI surged passed the 3,000 mark for the first time in its history on February 13,[6][7][9] reaching a record high for the seventh consecutive day.[7] The CSE has also recorded an average daily turnover of Rs. 776.8 million for 2007.[9]

Post war boomEdit

After the end of the Sri Lankan Civil War on 18 May 2009, CSE indexes increased rapidly creating new records. Market capitalization at the Colombo Stock Exchange reached a record high on 6 October 2009 as it reached the Rs. 1 trillion marks for the first time in Sri Lanka’s history.[10] All Share Price Index (ASPI) broke the record for its previous high by marking 3549.27 points on 11 January 2010.[11] CSE was the best performing stock exchange in the world in 2009 as it jumped 125.2 percent during that year.[12]

Recent yearsEdit

Colombo Stock Exchange has transferred nine companies to their Watch List with effect from today due to the non-submission of interim financial statements for the period ended 31 March 2018.[13]

The Colombo Stock Exchange (CSE) made a statement that investment flows from the Scandinavian region to Sri Lankan stocks have made a noteworthy improvement in recent years, where inward investments have grown by 39 percent per annum (CAGR) since 2013. According to a CSE statement, Scandinavian countries have collectively invested Rs.8.2 billion in local equities year-to-date, which amounted to 23 percent of the total foreign purchases during the period.[14][15]

The National Stock Exchange (NSE) and the Colombo Stock Exchange (CSE) signed an agreement to explore opportunities to work together and foster a strategic relationship. The agreement is intended for cooperation on the exchange of information and expertise and also paves the way for the NSE to play a consultative role in a number of strategic initiatives implemented by the CSE, including in new product development and exchange operations.[16]

The Colombo Stock Exchange launched a guide for listed Sri Lankan companies to help them address environmental, social, and governance (ESG) factors in their capital market communications.[17]

Current statusEdit

FinancialEdit

The Colombo Stock Exchange (CSE) has 290 companies representing 20 business sectors as of 30 June 2019, with a Market Capitalization of Rs. 2,523.38 Bn.

There are currently two indices in the Colombo Stock Exchange:

  1. The All Share Price Index (ASPI)
  2. The S&P Sri Lanka 20 Index (S&P SL20)

(Milanka Price Index - MPI was abolished after 30/12/2012)

Sustainable Stock ExchangeEdit

On 24 September 2015, Colombo Stock Exchange declared its entry in to the United Nations Sustainable Stock Exchanges Initiative and its intentions to promote corporate, Social and Governance (ESG) issues, with the support of the local network of the United Nations Global Compact.[18]

Trading sessionEdit

The exchange works only on weekdays (except national holidays). Due to the COVID-19 pandemic, since 26 May 2020 the market trading hours were amended from 09:30 to 14:30, to 11.00 to 14:30.[19]

TechnologyEdit

The CSE operates 2 main systems:

  1. The Central Depository System (CDS)
  2. Automated Trading System (ATS)

(After implementing ATS version-7, The Debt Securities Trading System (DEX) was abolished since ATS-7 provides a platform for both Debt & Equity)

The automation of the Exchange commenced in 1991 with the installation of a central depository and an electronic clearing and settlement system for share transactions. The trading activity was automated with the installation of the Automated Trading System (ATS) in 1997.

The CSE is currently in the process of introducing a debt securities trading system for trading fixed-income securities.

As a modern exchange, the CSE now offers an "order-driven trading platform" for securities trading - including shares, corporate debt securities, and government debt securities.

AffiliationEdit

The CSE was selected as a member of the World Federation of Exchanges in October 1998 and also was the first Exchange in the South Asian Region to obtain membership. The CSE is the 52nd Exchange to have been elected to membership of the Federation.[20]

  • South Asian Federation of Exchanges

The CSE became a founding member of the SAFE in January 2000 and is currently the Chairman of the Association. SAFE consists of 17 exchanges from India, Pakistan, Bangladesh, Sri Lanka, Nepal, and Bhutan. Its primary objectives are to encourage cooperation among its members to promote the development of their individual securities markets, to develop an integrated regional stock trading system, and to offer to list and trading opportunities for securities issued in the region.[20]

The CSE joined Sustainable Stock Exchanges Initiative in September 2015.[20]

Foreign investorsEdit

Companies listed on the CSE have seen a large increase in foreign investment following the winning of the 30-year-old civil war by the Sri Lankan Government.

Foreign investment in the stock market is freely permitted except in the case of a few companies where there are certain restrictions imposed. Investment in shares in Sri Lanka and repatriation of proceeds take place through Share Investment External Rupee Accounts (SIERA) opened with licensed commercial banks. Income from investments such as interest, dividends, and profit realized from such investments are not subject to Exchange Control Regulations by the Sri Lankan Government.

See alsoEdit

ReferencesEdit

  1. ^ a b "Sri Lanka stocks hit new high, investors Rs318bn richer over week". EconomyNext. 22 January 2021. Retrieved 25 January 2021.
  2. ^ Sri Lanka's stock exchange opens new regional branch Archived 2007-08-06 at the Wayback Machine, Lanka Business Online
  3. ^ Nadeera, Dilshan. "CSE turnover surpasses Rs 14 billion, ASPI records historic high". Retrieved 2 September 2021.
  4. ^ "Colombo stock exchange ASPI reaches all-time high". NewsWire. 26 August 2021. Retrieved 2 September 2021.
  5. ^ "Another record day at Colombo Stock Exchange". NewsWire. 1 September 2021. Retrieved 2 September 2021.
  6. ^ a b c "Historic day for Colombo Bourse". The Daily News. 14 February 2006. Archived from the original on 16 February 2007. Retrieved 17 February 2007.
  7. ^ a b c "CSE creates history - ASPI crosses 3,000". The Daily Mirror. 14 February 2006.
  8. ^ Colombo Stock Exchange broke several records in 2009
  9. ^ a b "Sri Lanka's benchmark stock index close above 3000 points". Lanka Business Online. 13 February 2006. Archived from the original on 27 September 2007. Retrieved 17 February 2007.
  10. ^ Colombo Stock Exchange Reached Record High
  11. ^ Sri Lanka shares hit a new peak on heavy local buying
  12. ^ Sri Lanka stocks at the fresh peak after doubling in 2009
  13. ^ "CSE transfers companies to Watch List due to non-submission of reports". LBO. 7 June 2018. Retrieved 15 June 2018.
  14. ^ "Nordic interest on Lankan stocks growing, says CSE". Daily Mirror. 30 May 2018. Retrieved 11 June 2018.
  15. ^ "Sri Lankan equities attracts wider international audience-CSE". Sunday Times. 29 May 2018. Retrieved 14 June 2018.
  16. ^ "NSE and Colombo Stock Exchange ink pact to collaborate". 3 April 2018. Retrieved 15 May 2018.
  17. ^ "Sri Lanka stock exchange launches sustainability guide for listed firms". Economy Next. 16 March 2018. Retrieved 19 April 2018.
  18. ^ Colombo Stock Exchange (28 September 2015). "CSE joins United Nations SSE Initiative" (PDF). Colombo, Sri Lanka. Archived from the original (PDF) on 6 October 2015. Retrieved 4 October 2014.
  19. ^ "Trading Sessions". Colombo Stock Exchange. Retrieved 8 May 2021.
  20. ^ a b c "Affiliation - Colombo Stock Exchange". www.cse.lk. Retrieved 30 May 2018.

External linksEdit