Monday Aug 18, 2025
Monday Aug 18, 2025
Monday, 18 August 2025 02:00 - - {{hitsCtrl.values.hits}}
SEC Chairman Senior Prof. Hareendra Dissabandara
Securities and Exchange Commission (SEC) Chairman Senior Prof. Hareendra Dissabandara recently said the necessary groundwork is complete to list State-owned enterprises (SOEs) on the Colombo Stock Exchange (CSE).
Speaking at the Invest Sri Lanka Forum in Singapore last week, he said that the infrastructure is ready and that the Catalyst Board, set up specifically for SOE listings, is in place.
“Targeting SOEs, we have done many things, and our infrastructure is there. Our Catalyst Board is ready, and it is dedicated for SOE listings. I think almost all the requirements are fulfilled. Now the only thing is for the Government to be ready and think about listing,” he told investors at the Invest Sri Lanka Forum hosted by the SEC and CSE in Singapore.
Senior Prof. Dissabandara pointed out that the SEC has held multiple rounds of discussions with policymakers, including a meeting with the Minister on the same morning of the Forum.
He noted that in the past, Sri Lankan politicians and policymakers were hesitant to endorse SOE listings, fearing that such moves would be equated with privatisation.
“In the past, politicians and policymakers were afraid to openly say they were going to list SOEs in the capital market because they thought it was privatisation.
Now, luckily, this Government has understood the importance of capital formation through the capital market. Even the President (Anura Kumara Disanayake) has openly mentioned that SOEs must come through a holding company and be listed. Considering our borrowing capabilities at the moment, there is no other option,” the SEC Chief said.
He stressed that accessing market-based financing is critical if SOEs are to grow and restructure successfully. “If you really want to have vibrant plans for the SOEs, they must come to the Sri Lankan capital market and raise capital.”
To illustrate the potential of the market, Senior Prof. Dissabandara pointed to Cinnamon Life, the $ 1.4 billion mixed-development project by John Keells Holdings (JKH). “I always criticise and challenge the Government with this example. Cinnamon Life is one of the largest private sector investments in the country. It was $ 1.4 billion, which is half of the ongoing International Monetary Fund (IMF) program. If a private company in Sri Lanka can do this, why can’t the Government? This Government understands that SOEs must be revived and that they can do wonders if they access capital from the market.”
He argued that reliance on debt financing should be reduced. “We must not think only about borrowing. We must stop talking about borrowed money and reduce the volume of debt. We must think about the potential of the Sri Lankan capital market. Cinnamon Life is a good example. Of the $ 1.4 billion investment, the majority was raised through the Sri Lankan capital market,” Senior Prof. Dissabandara said.
The SEC Chief said the conditions are favourable for SOE listings and for broader market development.
“This market has the potential, and we have a good environment. Never in the past did we have this kind of atmosphere. Now, the macroeconomic variables are strong, the economy is stabilising, and the mindset of policymakers is supportive. Almost all the requirements are satisfied. The playground is ready, now we have to play the match.”
Addressing a question on the balance between regulation and market growth, Senior Prof. Dissabandara acknowledged that regulators are often seen as rigid. “Regulators are usually very rigid, and we were very rigid during the last several years. Now we have changed our approach. Rather than only regulating, we are also facilitating.”
He said the SEC has shifted to a collaborative stance with stakeholders, including brokers, intermediaries, and market operators.
“We are working very closely and in harmony with almost all stakeholders, not only the Self-Regulatory Organisation (SRO) and the operator, but also the brokers and intermediaries. That is why we are here even today. We try to facilitate market development. Regulation is important, and we are doing it and will continue to do it. But for regulation to be meaningful, you must have a strong market. Market development is our key, and for that, we need to strike a balance between development and regulation.”
As part of this shift, the SEC introduced a set of 12 transformative projects six months ago.
“We formulated 12 key transformative projects. Most of these are joint projects with stakeholders, not just the SEC alone. These include the digitalisation of the CSE, development of corporate foreign markets, digitalisation of the broader Sri Lankan market, and new product development. Encouraging new listings is a major focus, and under that, we thought of SOEs.”
Senior Prof. Dissabandara also discussed the SEC’s progress on settlement cycle reforms. Sri Lanka has recently transitioned from a T+3 to a T+2 settlement cycle, with the next target being T+1.
“Sri Lanka has already moved from T+3 to T+2. The next target is T+1. To achieve this, there are two challenges: operational and structural. Operationally, custodians, banks, and brokers must be linked to the system, and we have to operationalise certain processes. At the stock exchange level, we need to fine-tune systems. With the implementation of a central counterparty (CCP) system, I believe things will run more smoothly. Structurally, we must also fulfil certain requirements. Discussions are ongoing, but this will not be a quick process. It will take some time, but we are working towards it.”
The SEC Chief said that Sri Lanka’s current macroeconomic environment and political climate provide a strong foundation for capital market growth. “Never in the past did we have this atmosphere. In the past, even when there was political stability, market sentiment was weak. Now, the macroeconomic variables are strong, and the Government’s mindset is aligned with capital market development. Almost all the requirements are satisfied.”
He reiterated that the regulator’s role was to both supervise and enable. “As a regulator, we must facilitate market development while also regulating. It is a difficult balance, but we are doing it.”
