2011, record year for IPOs

2011 is a record year for Initial Public Offerings(IPOs) with seven upto now and many more in the pipeline, said Director Bartleet Mallory Stock Brokers Anjelo Ranasinghe.

Speaking on ‘IPO’s in the current Sri Lankan Economy’, he said that some companies will be listed through introductions while the others will be through IPOs.

He said that IPOs contribute towards market driven economic growth. It is an attractive tool to raise fresh capital for small, medium and large enterprises in the private and public sector.

In Singapore and Malaysia, market capitalisation to the GDP ratio is 250 times while in Sri Lanka it is only 50 times. It should be at least 100 times, he said.

Lack of market debt is one drawback we experience.

IPOs are greater investment options for rational investors and at present Asia Pacific dominates the IPO market. “Be patient and selective as the market is not a place to gamble but to invest,” Ranasinghe said.

The six IPOs held this year are Singer Finance Lanka, Pan Asian Power, HVA Foods, Union Bank, Free Lanka Capital Holdings, Expo Lanka Holdings and Vallibel Finance have added Rs. 5.76b to the stock market.

Senkadagala Finance Company Ltd , Swarnamahal Financial Services Ltd, The Multi Finance Company, Chilaw Finance, Commercial Credit Ltd, AMW Capital Leasing Ltd, Mercantile Investments Ltd, Associated Motor Finance Ltd, Bimputh Lanka Finance Ltd, and Abans Financial Services have listed their shares after the Central Bank’s directive for registered finance companies to list on the stock exchange by June 30.

The shares of these companies are ready for trading now.

-SG