Fitch downgrading will impact market - CSE chief

The CSE has achieved many milestones and has performed exceptionally well compared to many Stock Exchanges in the region, CSE Chairman Vajira Kulatilaka told the media at the Lanka Orix Leasing Company PLC (LOLC) bell-ringing ceremony to commence trading last week.

He said the bell-ringing has picked up and it is on par with international standards.

The LOLC opening of trading at the CSE marked the third ringing for the year. The CSE's performance in recent weeks has been low which market analysts attribute to the global economic slowdown triggered by sluggish growth of the Chinese economy and the fall in global oil prices.

"All around, 2016 is not a good year for the markets. However, this is not the end of the world. The bad cycle will end soon," the CSE chairman said.

When asked about the impact of the downgrading by Fitch on the CSE, Kulatilaka said the negative rating will have some impact on the market. However, the country will have to improve its ratings to boost investor confidence.

The CSE's roadshow in the Maldives will help it to be a regional player, Kulatilaka said.

"I'm proud to see how LOLC has excelled in many industries and cemented its position as a true conglomerate. Going beyond leasing to micro lending to help build the rural economy and bring people out of poverty is a commendable move," he said.

Kulatilaka commended LOLC's continued commitment to SME and regional development through the company's Micro Lending facilities and invited the company to showcase its credentials at foreign roadshows organised by the CSE in future.

LOLC Group Managing Director and CEO Kapila Jayawardena said, "We will be committed to support the CSE by investing and expanding our presence in the market. LOLC has a strong presence in the CSE through our 12 listed companies and that will only continue to grow as we expand our reach locally and internationally."

"Our strong track record in banking and managing businesses and commitment to investing will help expand our base in the share market," he said.

The US$ 247 million raised through the syndicated loan, the largest by a Sri Lankan corporate will be used to repay the corporate debt and strengthen the SME sector and micro business to enrich the rural sector.

With regard to the Fitch downgrading of Sri Lanka's rating, he said it would not have a major impact on raising funds from overseas markets. Many global banks have been downgraded.

- LF