Page 39 - CPM Sri Lanka-Chartered Manager-Sept. 2021

THE INSTITUTE OF CHARTERED PROFESSIONAL MANAGERS OF SRI LANKA
JANUARY 2021

The Colombo Stock Exchange (CSE) the only Singapore economy. If we expand the sector to include
authorized Stock Exchange in Sri Lanka is significantly ‘Services Producing Industries’, the growth in value
investing in transforming the CSE into a world class over the same period was from SGD 42.8bn to SGD
exchange. CSE is optimistic about Port City Colombo 313.7bn (annual growth of 34%). This example helps
and the benefits it will bring to the capital market. enlighten the need for a separate exchange within
Rajeeva Bandaranaike – CEO and Purasisi Jinadasa – Port City Colombo.
Head of Origination and Issuer Relations, Colombo Stock The Colombo Stock Exchange (CSE) looks forward
Exchange spoke more about their aspirations on Port to being an active partner in developing a truly world-
City Colombo. Following are excerpts of the interview. class city, backed by an innovative financial services

The Colombo Stock Exchange (CSE) recently sector, which is currently not possible on-shore.
entered into an MoU with Port City Colombo Discussion on capital markets is often limited to the
(PCC) to establish a regionally recognized stock asset class of equities. How do you envision this
exchange within the Port City. What is the need regional exchange to be a home for corporate
for establishing a new stock exchange alongside debt markets, REITs etc? Have you identified the
the CSE? potential for any other instruments?

Rajeeva: An offshore exchange established within the Purasisi: We are evaluating the venture from a
Port City Colombo will enable the development of a much broader and longer-term view, keeping
more vibrant financial eco-system, which will have a in mind the evolving environment of the global
trickle-down effect on the wider economy over time. financial services sector. An offshore exchange will
Port City Colombo’s favorable policies which include place us on a more level playing field vis a vis other
free flow of foreign exchange and preferential tax global financial centers in terms of the ability to
policies, among others, will enable the development develop core competencies and lucrative financial
of more complex and innovative financial services instruments for clients. A key advantage we have is
sector targeting a more sophisticated global client that we are at the initial stages of execution, giving
base. These preferential policies within the Port City us the flexibility to create the right environment
Colombo will create an enabling environment to for up-and-coming changes within the global
attract global financial institutions and their High-Net- financial system. We will have the standard
Worth clients (HNIs), which would spur the growth of markets for equity, debt and various asset-linked
a wider eco-system within the PCC – on par with the securities; however, we are also evaluating the
best in class financial and services centers globally. potential of fostering a financial technology hub.
Given the growing shift towards and acceptance
Singapore can be taken as an example of the of novel types of tech-based assets, we may look
growth potential of a successful financial center. The at a solution to becoming a legitimate global hub
contribution to GDP from the Singapore Finance and for the development and exchange of such assets.
Insurance sector was SGD 9.2bn in 1990, growing to Similarly, given the evolving physical environment
SGD 70.3bn in 2020 (current prices). This translates to globally, we may explore the opportunity of
an annual growth rate of 7% over 30 years. Although developing competencies in promoting the listing
this may be perceived as a low growth figure, the of financial instruments that look at mitigating risk,
development of the financial sector was a key driving among others.
force for the growth of several core sectors within the

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