Sri Lanka’s capital market opportunities get spotlight at Investor Forum in Riyadh

The Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE), in collaboration with the Embassy of Sri Lanka to the Kingdom of Saudi Arabia, successfully convened an investor forum on 24 January 2026, at the Radisson Blu Hotel, Riyadh Convention and Exhibition Centre, aimed at promoting Sri Lanka’s capital market to international and diaspora investors. In parallel with the forum, the SEC and CSE also facilitated discussions with Saudi Arabia’s Public Investment Fund (PIF), the Kingdom’s principal sovereign wealth fund.

The forum was organised to engage directly with the Sri Lankan expatriate community in Saudi Arabia as well as international investors, highlighting investment opportunities emerging from Sri Lanka’s capital market following the country’s exit from sovereign default and the restoration of macroeconomic stability.

The event brought together senior policymakers, regulators, and market leaders, including Central Bank of Sri Lanka (CBSL) Governor Dr. P. Nandalal Weerasinghe, Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe, Sri Lanka’s Ambassador to Saudi Arabia Ameer Ajwad, SEC Chairman Senior Prof. D.B.P.H. Dissabandara, CSE Director Ray Abeywardena and Lynear Wealth Management Co-Founder and Managing Director Dr. Naveen Gunawardane.

Delivering the welcome address, Ambassador Ajwad underscored the significant potential to broaden public participation in Sri Lanka’s capital market, noting that limited financial literacy and investment awareness remain key constraints. He said the forum was designed to bridge this knowledge gap by equipping first-time, overseas, and experienced investors with insights on prudent investing, risk management, and disciplined wealth creation. He encouraged participants to engage actively with senior representatives from Sri Lanka’s key financial institutions, including the Central Bank, SEC, and CSE, and to view investment in Sri Lanka not only as a financial opportunity but also as a contribution to the country’s long-term resilience and prosperity.

Highlighting market performance, CSE Director Ray Abeywardena noted that the All Share Price Index had risen to over 23,800 points, representing a 120% increase since October 2024 following the Presidential Election. He said an equity investment made just over a year ago would have more than doubled in value, while capital gains in the Sri Lankan market remain tax-free. 

He also noted that in 2025 the CSE ranked as the third-best performing market in the region, recording full-year growth of 42% on the ASPI and over 26% on the S&P SL20. Despite this performance, he stressed that the market remains significantly undervalued compared to regional peers, offering one of the most compelling valuation propositions in Asia.

In his opening remarks, SEC Chairman Senior Prof. Dissabandara outlined the rationale for hosting the forum overseas to engage the Sri Lankan diaspora and international investors. He reiterated the SEC’s three core mandates of investor protection, market development, and effective regulation, emphasising that investor confidence is anchored in trust built through strong oversight, transparent governance, and swift action to protect market integrity.

In a video address, Labour Minister and Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando highlighted Sri Lanka’s economic stabilisation and strong performance in 2025, stating that macroeconomic and microeconomic indicators had exceeded expectations. 

He said the Government’s fiscal discipline and the build-up of a robust cash buffer had helped stabilise financial markets and maintain steady interest rates.

Deputy Minister Chathuranga Abeysinghe said Sri Lanka is now transitioning from recovery to a phase of rapid economic growth, supported by legal and technology-driven reforms to improve the ease of doing business. He pointed to Sri Lanka’s strategic positioning as a regional hub, anchored by Port City Colombo and expanding maritime capabilities, alongside growing momentum in value-added manufacturing, high-growth services, and SMEs, which are already generating above-average capital market returns.

Providing the macroeconomic outlook, CBSL Governor Dr. Nandalal Weerasinghe projected economic growth of close to five percent in 2025, despite the impact of Cyclone Ditwah in the fourth quarter, with medium-term growth potential rising to six to seven percent through continued reforms. He announced that foreign reserves are expected to reach USD 8 billion by the end of the year, achieved through foreign exchange earnings rather than borrowings, marking three consecutive years of reserve accumulation. He also highlighted the adoption of a flexible exchange rate regime and regulatory reforms that will encourage large corporates and state-owned enterprises to raise capital through the market.

Offering a market perspective, Dr. Naveen Gunawardane said IMF-backed reforms have ushered Sri Lanka into a new phase of macroeconomic management characterised by stability in interest rates and the exchange rate. He noted that this shift is likely to drive greater participation by domestic institutional and retail investors in equities and real estate. Despite the recent rally, he said Sri Lanka’s equity market remains structurally undervalued and under-invested by foreign investors, with Lynear’s coverage universe trading at a one-year forward price-to-earnings ratio of 9.4 times and the banking sector at 0.9 times estimated December 2026 book value.

The main segment of the forum was a high-level panel discussion on the outlook for Sri Lanka’s equity market, moderated by CSE Chief Executive Officer Rajeeva Bandaranaike. Panelists discussed market resilience, recent policy reforms, and improvements in investment infrastructure that support sustainable growth. Participants also engaged directly with officials from the SEC and CSE and representatives of leading Sri Lankan stockbroking firms during a networking session that followed.

The Riyadh forum formed part of a broader series of strategic engagements with international and diaspora investors, following a similar event held recently in Dubai. Organisers said the strong participation reflected growing confidence in Sri Lanka’s economic revival and capital market prospects, while providing investors with direct access to information on long-term opportunities through the Colombo Stock Exchange.