Rajeeva Bandaranaike Chief Executive Officer Colombo Stock Exchange (CSE) has sent the following with regard to the article titled “Stockbrokers to be called up on limiting corporate debt trading” published on April 23 of the ‘Daily News Business.’
“I wish to bring to your notice that the writer has completely misquoted comments made by me in response to questions raised by the journalist (outside the media Q&A segment) on the sidelines of a recent event held at the CSE.
The limited trading activity in the corporate debt market has not been attributed to stockbroker firms. This statement is not an accurate reflection of the comment made by me in this regard, where I only stated that improving trading in the corporate debt market will be discussed at a future meeting between the CSE and CSE Members and Trading Members as part of other capital market matters discussed during such an engagement. No allegations with regards to stockbroker firms limiting corporate debt trading were mentioned by me to the journalist. With regards to the comment: ‘The Central Bank is not letting us list government securities’, I wish to bring to your notice that I did not make the said comment.
As both the investor community and capital market fraternity are aware, the trading of government securities is not presently serviced in the Sri Lankan stock market. The CSE is actively in the process of exploring the technical and practical possibilities of facilitating the trading of government securities through the Automated Trading System (ATS). The Central Bank (CBSL) has in fact been supportive of this process.
On the topic of Real Estate Investment Trusts (REITs) which reads, ‘Bandaranaike noted that the failure to list any Real Estate Investment Trusts (REIT) instruments was due to the failure of the government to gazette the promised tax structure for the products. There are many companies that are waiting to list,’ too is not an accurate reflection of the comment made by me.
While the comments made by me on this topic included an acknowledgement that the tax proposals made as part of the 2021 Budget with regards to REITs are yet to be included in a Gazette notification published by the Government of Sri Lanka, this acknowledgement was not linked to a failure in listing REITs.
While the tax exemptions introduced as part of the 2021 Budget proposals add to the attractiveness of REITs in an issuer’s perspective, the business case for issuing a REIT in Sri Lanka for eligible entities goes well beyond merely tax concessions.
I write this response as the article has the potential to mislead the readership on the stance of the CSE and the other organizations.”