Grow with the CSE……

And be financially empowered!

 What is a Stock Exchange?

Where securities,
securities such as shares and debentures
issued by listed companies are traded.

Vision of
Colombo Stock Exchange (CSE)
To be the preferred choice of creation of wealth
and value.
 P f
Performance off CSE…….
CSE
• The CSE was established in 1985 as a company
limited by guarantee
• CSE offers advanced facilities for secondary trading
of equity and debt instruments
• Regulated by Securities and Exchange Commission
off Sri
S i Lanka
L k (SEC)
• CSE has 15 members and 8 trading members
• 241 companies categorized to 20 sectors
 2010 Records are being re
2010…Records re-written
written…
• Highest ever ASPI –1st Oct 2010 – 7,147.77
• Highest ever MPI – 1st Oct 2010 – 7,829.05
g
• Highest number of transactions in a dayy – 21st
Sept 2010 - 36,888
• Highest
g market capitalization
p – 1st Oct 2010 –
Rs. 2,358.4 Billion
• 2ndd best pe
performing
o g market
a et in the
t e world
wo d –
Bloomberg newswire – 11th Oct 2010
 Primary Market

The market for the issue of new securities by

companies or governments to investors to raise
f d In
funds. I the
h Primary
Pi M k the
Market, h securities
i i are
purchased directly from the issuer. The
Primary Market serves to channel funds from
savers to borrowers.
 Secondary Market

The Secondary Markets are the markets in which

previously issued securities are traded among
investors.
 What is a Quoted Company?

A Quoted Company is a company whose shares

or debentures are traded on the Colombo Stock
Exchange
Also known as a Listed Company
 Types of Securities Traded
•Ordinary Shares
Voting (N) and Non-Voting (X)
•Preference Shares (P)
•Share Warrants (W)
•Corporate Debentures
•Government
Government Debt Securities
Treasury Bills and Bonds
• Close-End Funds
 Listing Methods
• Offer for Subscription
− An Offer for Subscription is an invitation to the public by or
on behalf of an Entity to subscribe for its Securities.
• Offer for Sale
− An Offer for Sale is an invitation to the public by, or on behalf
of holder(s) or allottee(s) to subscribe for its Securities already
in issue.
• Introduction
− An Introduction is the listing of the Securities of an Entity on
the Exchange without the requirement of an initial public
g
offering.
 Listing Procedure

• Amendment to Articles of Association

• Preparation
P ti off Prospectus
P t / Introductory
I t d t
Document
• Submission of Initial Listing Application
• Public Issue Procedure
• Initial Listing Fee
 Recent Successes on the Bourse..2010..so far
Company Date Listed No of times
oversubscribed
b ib d
Renuka Agri Foods 4th January 12.07
Ceylon Tea Brokers 16th March 10 52
10.52
Raigam Wayamba 29th April 19.71
Salterns
Vallibel Finance 4th May 9.12
ODEL 4th August 63.9
PC House 26th August 4 26
4.26
Hydro Power Free Lanka 25th November 57
g Gas Limited
Laugfs 8th December 20
Recent Successes on the Bourse..2010..so far

Issuer Amount Raised No of times

oversubscribed
Urban Development LKR 11.024 bn 1.1
Authority
Bank of Ceylon LKR 5.8 bn 1.2
 Who can trade?

• Local Individuals (LI)

• Local Companies (LC)

• Foreign
F i IIndividuals
di id l (FI)

• Foreign Companies (FC)

 H to
How t Buy/Sell
B /S ll Securities
S iti
•Contact your Stockbroker
•Specify
¾Name of Company
¾N b off Sh
¾Number Shares
¾Price
ƒ Pay for stocks Bought on T+3
ƒ Receive
R i paymentt for
f stocks
t k SSold
ld on T+3
 Who is a Stockbroker?
Services offered by 23 licensed brokers

ƒ Trading
T di facilities
f ili i
ƒInvestment Advice
ƒResearch
ƒMargin
M i F Facilities
iliti
ƒCorporate Finance services
 H to select
How l aS Stockbroker
kb k

ƒ23 stockbroker firms

ƒServices offered by brokers

ƒInternet Trading facilities

ƒResearch
 T di Sessions
Trading S i

Market Phase Time

Pre-open 9:00 – 9:30

Open Auction 9:30
Normal Trading 9:30 – 14:30
Closing 14:30
 Transaction Costs

Transactions up to Rs. 50 Mn 1.020%

Brokerage Fees 0 640
0.640
CSE Fees 0.084
CDS Fees 0.024
SEC Cess 0.072
Share Transaction Levy 0.200
 Transaction Costs

Transactions over Rs.

Rs 50 Mn 0.5125%
0 5125% (min)
Minimum Brokerage (Floor) 0.200
CSE Fees 0.0525
CDS Fees
F 0 0150
0.0150
SEC Cess 0.0450
Share Transaction Levy 0.2000
 What Factors Influence Market
Price?
Expected Earnings Risk Factors
- Earnings estimates by • Macroeconomic Factors
research • Industry Factors
analysts/industrial • Company factors
experts
 Price Indices
ƒ All Share Price Index (ASPI)

ƒ Milanka Price Index (MPI)

ƒ Total Returns Index (TRI)

ƒ 20 Sector Price Indices

 All Share Price Index

ASPI = Market Cap. of All Listed Companies

Base Market Cap. p (1985)
( )
x 100
 Milanka Price Index

Features
• 25 Companies
• Based on Market Cap, Liquidity
• Revised semi-annually
Movement of ASPI and MPI
Movement of ASPI and JKH
 Contribution to Total Purchases

100%

80% 39.67
55.43
64.65
75 5
75.5 75 85
75.85 71 23
71.23
60% 84.98 81.12 80.97
Local
%

40% Foreign
60.33
44.57
20% 35.35
24.5 24.15 28.77
15 02
15.02 18.88 19.03
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009
26th Oct

Year
Contribution to Total Purchases

2009 2010 (upto Nov.)

Foreign Local
 COMPARISON WITH SOUTH ASIA

230
2 10
19 0
170
150
13 0
110
90
70
50

C OLOM B O B OM B A Y KA R A C HI
 COMPARISON WITH EAST ASIA

230
2 10

19 0
170

150
13 0

110
90

70
50

C OLOM B O KU A LA LA M PU R JA KA R T A
 COMPARISON WITH OTHER ASIAN MARKETS

230

2 10

19 0

170

150

13 0

110

90

70

50

C OL OM B O H ON GK ON G S EOU L S I N GA P OR E
 COMPARISON WITH DEVELOPED MARKETS

230

2 10

19 0

170

150
13 0

110

90

70

50

C OLOM B O TOKY O LON D ON N EW Y OR K A U S TR A LIA

 Recent Developments

ƒ Appointment of new
ne settlement banks
3 New banks appointed .
B k Of C
Bank Ceylon,
l Commercial
C i l Bank
B k andd HSBC
ƒ New Surveillance System Commissioned by the
National Stock Exchange of India
ƒ Amendments to the SEC Act
ƒ Listing of the First Closed - end Fund
 Recent Developments
• Expansion of Branch Network – Jaffna

• More Stock
S k Broker
k li licenses
– 2 new Brokers in 2010
– Few more to start operations in 2011
Thank You