SEC’s new listings drive welcomed

Asia Securities has welcomed the resolve by the Securities and Exchange Commission (SEC) to increase the number of new listings on the Colombo Stock Exchange.

“It is very encouraging to hear that the Securities and Exchange Commission is endeavouring to augment the Colombo bourse market capitalisation by 45% during 2011. What is more encouraging is that the envisaged increase is via new listings in the market,” Asia Securities said.  SEC foresees approximately 75 IPOs during 2011.

Asia Securities noted that SEC’s expectation implied a monthly average of around six listings, whilst the SEC also plans to list gold and metal back ETFs. “This envisaged scenario would definitely create new options to our investor community. Options that would create more choice in terms of investing,” Asia said, adding, “Invariably making investors look at different stocks/options to create healthy investing as opposed to looking at the same counters and pushing them ‘up’ and ‘selling.’”

However, Asia Securities urged bringing in fundamentally strong counters, injecting reasonable liquidity levels to the market.

“Further, the investor community too needs to look at these counters with sustained outlook, as opposed to the perception of making a ‘first day’ gain and ‘never look at it’. Only eight new listing were experienced during 2010, and all of them were oversubscribed,” Asia said, adding that it portrayed investors’ thirst for new listings.

Listing the 2010 new listings (see table), Asia said it clearly showed the favourable investor appetite for new companies. “Hence, the market would undoubtedly look at new listings on a favourable note,” Asia Securities added.