The Colombo Stock Exchange is the pivotal stock exchange of Sri Lanka. This is a fully automated Stock Exchange . Since 1995 it had its headquarters in the World Trade Center . It branches out in Kandy, Matara and Kurunegala .
The following head traces the history and the evolution of the Colombo Stock Exchange
Evolution of the Colombo Stock Exchange
Share trading took birth in SriLanka with Colombo Brokers Association in 1896. The Colombo Stock Exchange was established formally in 1985. It has 15 members are all of them have licenses with the help of which they can operate as stockbrokers.
Recent Story of the Colombo Stock Exchange
By 2005 about 243 companies were listed on the Colombo Stock Exchange. It reached a market capitalization of US $4.9 billion, which are about 245 of the Gross Domestic Product of the country.
Indices used by the Colombo Stock Exchange
There are two indices used by the Colombo Stock Exchange:
- The All Share Price Index
- The Milanka Price Index
Technology Used
There are three main systems used by the Colombo Stock Exchange and they are:
- The Central Depository System : This was started in 1991 accompanied with the electronic clearing and settlement system for share transactions.
- Automated Trading System : This system started in 1997 with the help of which the system became fully automated.
- Debt Securities Trading System : This system is introduced for trading in fixed income securities.
The Colombo Stock Exchange is attempting to form an order driven trading platform to facilitate trading in shares, corporate debt securities and government debt securities.
Foreign Investors participating in the Colombo Stock Exchange
The Civil War ended with the ceasefire agreement signed by the Sri Lankan government. After this there was a huge surge in the volume of foreign investmen t in the Colombo Stock Exchange . The foreign investors interpret the Colombo Stock Exchange as highly undervalued - the reason of this rush in foreign investments.
The foreign investors have no restriction on their participation in the Colombo Stock Exchange, few companies being the exception to the rule. Investments in shares as well as the repatriation of the income earned from such investments are carried out through the Share Investments External Rupee Accounts (SIERA) opened in the licensed commercial banks . Income earnings such as interest, dividends, profits etc are beyond the purview of the Exchange Control Regulations of the Sri Lankan Government.