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Sri Lanka Exchange Considers Stock Float Rule to Lure Investors

Photographer: Brent Lewin/Bloomberg

Stock traders watch their computers at the Colombo Stock Exchange in Colombo, Sri Lanka. Close

Stock traders watch their computers at the Colombo Stock Exchange in Colombo, Sri Lanka.

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Photographer: Brent Lewin/Bloomberg

Stock traders watch their computers at the Colombo Stock Exchange in Colombo, Sri Lanka.

Sri Lanka’s stock exchange is considering a rule ensuring companies have a minimum amount of stock available for trade to lure foreign investors.

The bourse is discussing the minimum free-float requirement with regulators, investors and companies and plans to introduce the rule by the end of the year, Krishan Balendra, chairman of the Colombo Stock Exchange, said in an interview in Mumbai yesterday. The exchange is also talking to the government about listing state-owned enterprises, he said.

“We need more companies and more liquidity to attract foreign participation in the markets,” Balendra said.

The bourse is seeking to lure more international investors to a market valued at $17.5 billion, making it the smallest of 16 Asian-Pacific stock markets tracked by Bloomberg. Overseas investors have sold a net $3.9 million of Sri Lankan shares this year, after buying $300.4 million last year, according to data compiled by Bloomberg.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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