• The Colombo Stock Exchange has 20 companies preparing to go public, with three applications already submitted
• Positive economic trends and low interest rates are driving a shift to equity, attracting both local and foreign investors

The Colombo Stock Exchange (CSE) has planned 20 initial public offerings (IPO) this year, which are in various stages of preparation with the respective investment banks, CSE Chief Executive Officer Rajeeva Bandaranaike said.

Speaking to Channel NewsAsia, he said that the 20 IPOs are not sitting with the CSE at the moment and they are in various stages of preparation with the investment banks.

He added that CSE has 3 IPO listing applications pending while another three debt issues are in the pipeline for the year.

Bandaranaike said that with economic growth and progress in Sri Lanka, companies are requiring more capital which cannot be funded through their traditional sources and now they are trying to reach out to capital markets for expansion purposes.

Moreover, he said with the recovery, positive economic numbers and political stability is driving investor sentiment at the CSE, while the low interest rate regime has caused the investors to shift their portfolio from debt to equity.

Further, he said that CSE has managed to raise over $ 586 million through the market through debt and equity capital and this year, about half of that figure has been raised in the first six months.

He said that the current portfolio at the CSE has about 22% of foreign investors, which is well below the pre-crisis level of 30-35%.

Bandaranaike said that foreign investors should look into the CSE rather than peers in the ASEAN region due to the valuation being lower than in peer markets with a price earnings ratio (PER) of 8-9 in the books.