Increasing Sri Lanka’s private debt

Seylan Merchant Bank says it hopes to have some 1000 debt trading accounts active by end September, to trade in the CSE’s debt trading system. Seylan Merchant Bank says it hopes to have some 1000 debt trading accounts active by end September, to trade in the CSE’s debt trading system. The DEX initially limited to govt., debt was opened up for corporate debt on Aug 1, increasing interest in the secondary market for debt instruments.

The DEX allows corporate debt to be listed on the CSE and traded, giving the public an alternate exit mechanism if they need to liquidate their investments early.

Seylan Merchant Director and General Manager Rohan Senanayake in a statement on Tuesday said “Globally, the debt market is about three times the size of the equity market but this is not the case in Sri Lanka. Through our extended involvement in the DEX we hope to significantly increase the volume of debt traded and develop this market.”

The firm meanwhile said it is the only licensed debt dealer or broker with the back-end facility developed for trading in bonds, bills and corporate debt through DEX.

The statement said the bank has automated the entire system of debt trading, and has real-time access to information on trading through CSE and the DEX.

“Our system can handle 5000 to 6000 trades a day,” Senanayake said.

Meanwhile since the liberalization, Sengadagala Finance has said it would list its debt on the DEX, making it the first debt instrument to be listed on the debt board directly.

-LBO Newsdesk: lboemail@vanguardlk.com