📈 SEC Drives SOE Listings Amid 2025 Capital Market Reforms

The Securities and Exchange Commission of Sri Lanka (SEC) intensified efforts in 2025 to list State-Owned Enterprises (SOEs) on the Colombo Stock Exchange (CSE) to enhance governance, transparency, and market-based funding while reducing Treasury reliance. • Overall Economy & Market: Sri Lanka's economy expanded by 5% in 2025, supported by improved macroeconomic stability, stronger foreign reserves, and a sovereign rating upgrade marking an exit from default. • Capital Market Reforms: Capital-raising on the CSE grew strongly in 2025. This was further pushed by a CBSL directive requiring banks to reduce single borrower exposures by January 2026, prompting large corporates to pivot toward equity and debt market alternatives. • Key Product & Sector Highlights: • Sustainable Finance: 9 Green, Blue, Social, Sustainable, and Sustainability-Linked Bond issuances raised approximately Rs. 54 Bn in 2025, accounting for 40% of total corporate debt capital raised. Cumulatively, 11 such issuances have raised Rs. 82.35 Bn. • Product Diversification: Introduced frameworks for Perpetual, Infrastructure, and High-Yield Bonds, Sukuk, stock borrowing and lending, and Regulated Short Selling. • Infrastructure: Established the Central Counterparty (CCP) framework via CSE Clear Ltd. to enhance settlement security and align post-trade infrastructure with global standards. _Note: Summary based on details released in the SEC 2025 Annual Report._