Sri Lanka’s stock exchange adopts global classification standard

Dec 03, 2015 (LBO) – Sri Lanka’s Colombo Stock Exchange (CSE) said it is adopting the Global Industry Classification Standard (GICS) to classify its listed companies along with S&P/CSE cobranded sector indices.

The Global Industry Classification Standard (GICS®) was jointly developed by Standard & Poor’s and MSCI Barra to meet the global financial community’s need for one complete, consistent set of global sector and industry definitions, the CSE said in a statement.

“The world’s leading financial professionals across all investment disciplines, including asset managers, institutional investors, consultants, and researchers have adopted GICS as the classification standard.”

The CSE intends to consider GICS as an alternative classification of companies for a pilot period of one year during which period the current classification would also be maintained alongside the proposed GICS, the statement said.

This will provide adequate time for the stakeholders to be comfortable with GICS facilitating a smooth transition. The pilot period commenced on Dec 02, 2015 and the classification of companies with market data can be accessed through www.cse.lk.

“We believe that the adoption of GICS by CSE is very important step for sector investing and portfolio diversification,” Vajira Kulatilaka, chairman of CSE said.

This globally accepted standard not only will enable foreign investors to analyze the sector diversity of the Sri Lankan equity market but also local investors to truly diversify, added Rajeeva Bandaranaike, chief executive of the CSE.

“We are sure that the decision to adopt GICS would enhance the market infrastructure and help the investors to better understand the characteristics and change of industry structure.”

The gradual implementation of the project will help smooth transition from the existing classification to GICS.” Alka Banerjee, managing director, head of Equity Indices Product Management, S&P Dow Jones Indices said commenting on the occasion.

”We are proud to be extending a very successful and strong relationship with the CSE, and look forward to being a part of the Sri Lankan equity market growth journey.”