Longtrepreneur continues to bring the best-in-class tech and business leaders to get their take on long-term thinking in the world of Commerce, Corporate Communications, Technology and Entrepreneurship.
This week’s “Take the L” series guest is a personality who needs no introduction: Rajeeva Bandaranaike (Chief Executive Officer at Colombo Stock Exchange).
Here is the conversation in an interview format between Yawar Abbas (Longtrepreneur) and Rajeeva Bandaranaike (Chief Executive Officer – Colombo Stock Exchange – CSE).
Yawar: What was the first thought on your mind this morning when you got up?
Rajeeva Bandaranaike: This morning, my first thought was the excitement of engaging with a group of entrepreneurs. I always look forward to these intellectually stimulating opportunities.
My focus on entrepreneurship as the cornerstone of economic growth has me thoughtfully planning my approach and message, drawing from my previous interviews and public discussions. The prospect of engaging with business leaders actively growing their ventures is an inspiring way to start the day.
Yawar: The Colombo Stock Exchange has set a target of $50 billion in market cap. How far is the stock exchange from reaching that goal?
Rajeeva Bandaranaike: We’ve established ambitious market capitalization targets to attract global investment, recognizing that size and liquidity are crucial factors.
Our market, currently at $20 billion, requires significant growth. Our strategy focuses on two key areas: attracting large private companies and facilitating state sector reform through public listings.
To accommodate state-owned enterprises, we’ve created a specialized board with tailored listing criteria that acknowledge their unique characteristics. The regulatory framework and legal infrastructure are now in place to support these listings.
Yawar: How different is the listing, listing criteria or listing standard from the main market listing criteria?
Rajeeva Bandaranaike: While continuing listing requirements remain consistent across all boards, with stringent corporate governance standards and disclosure rules uniformly applied, we’ve introduced strategic flexibility at the entry point for state-owned enterprises.
This accommodation includes modified requirements for audited accounts submission and liquidity thresholds, recognizing their unique shareholding structures.
However, core governance elements – such as audit committee requirements and composition – remain unchanged from the main market criteria.
This balanced approach maintains market integrity while facilitating state-owned enterprise participation, ensuring high standards of corporate oversight post-listing.
Yawar: What were you like growing up? Were you an introverted or extroverted person? And how has that shaped your outlook on business and entrepreneurship?
Rajeeva Bandaranaike: I’ve always leaned toward being extroverted, which has served me well throughout my career as a professional, even though I didn’t take the entrepreneurial route. My nature, combined with years of managing listed entities, has deepened my understanding of business dynamics. Through corporate leadership and regulatory roles, I’ve come to appreciate the challenges that come with running a company and raising capital.
This dual perspective drives my commitment to fostering entrepreneurship in Sri Lanka, where I believe we need more business builders than job seekers.
Yawar: How is the Colombo Stock Exchange helping build the Sri Lankan economy after the pandemic?
Rajeeva Bandaranaike: Sri Lanka’s remarkable economic recovery following the 2022 crisis highlights our market’s resilience. The Colombo Stock Exchange plays a vital role by facilitating capital raising and maintaining a transparent, well-regulated market environment.
Our robust corporate governance framework, disclosure rules, and investor grievance processes have helped strengthen investor confidence. Several state-owned enterprises, including the Ceylon Electricity Board, Bank of Ceylon, and Urban Development Authority, have successfully issued debentures through our platform.
This trend of market-based funding, particularly for state entities, represents a crucial shift away from government dependency. While significant reforms remain necessary, our exchange supports private and public sector capital needs.
Yawar: Can small private companies or startups raise debt capital from the CSE, or is it only limited to large-cap companies?
Rajeeva Bandaranaike: The journey to public markets follows a natural business evolution. Early-stage startups typically rely on angel investors, venture capital, and private equity before considering public listings.
Once companies achieve maturity and establish solid business foundations, the stock market serves as an exit mechanism for these initial investors.
While we engage with startup incubators and conduct workshops to promote this pathway, our focus remains on companies ready for their next growth phase.
The SME sector, in particular, represents businesses prepared for market entry – not nascent startups but established enterprises seeking capital for expansion. We launched the Empower Board for SMEs – not primarily for profit, but to provide opportunities for emerging entrepreneurs. This structured approach ensures companies access appropriate funding sources at each development stage.
Yawar: Why should international investors invest in the Colombo Stock Exchange?
Rajeeva Bandaranaike: Sri Lanka’s market presents compelling opportunities for investors, with attractive valuations relative to regional peers and renewed GDP growth at 5%. The exchange offers well-established companies with solid track records and maintains a 23% foreign investment portfolio even during challenging times.
Our market infrastructure adheres to global standards, featuring IFRS compliance, robust corporate governance, and T+2 settlement cycles. The fully automated trading system offers mobile access, comprehensive research tools, and seamless execution capabilities.
With no capital gains tax and unrestricted fund repatriation through commercial banks, Sri Lanka’s frontier market is competitive alongside Vietnam, Bangladesh, and Pakistan. A complete ecosystem of stockbrokers, investment banks, and portfolio managers supports it.
Yawar: What is your message to the Sri Lankan diaspora living in the West, on investing in the Colombo Stock Exchange?
Rajeeva Bandaranaike: As Sri Lanka regains economic momentum with a remarkable 5% GDP growth, we invite investors to experience the country firsthand, beyond prevailing perceptions. Investment opportunities span both direct and portfolio routes.
The IT sector, component manufacturing, and export-oriented industries offer promising direct investment prospects through the Board of Investment.
Our market presents 22 distinct business sectors for portfolio investors. Banking and finance provide strong liquidity, while hotels and leisure demonstrate seasonal strength.
The diversified companies sector and export-oriented industries continue to show robust performance. This variety reflects Sri Lanka’s position as a land of opportunity, poised for sustained growth.
Yawar: Do you foresee the Colombo Stock Exchange partnering with fintech companies?
Rajeeva Bandaranaike: Following the successful IPO of our first IT company, we’ve adapted our listing criteria to welcome more technology and fintech enterprises to the exchange.
Moving beyond traditional profitability requirements, we now accommodate companies with solid revenue and cash flows but without established profit histories—a characteristic common among tech startups.
Working closely with investment banks, we’re developing frameworks to evaluate these companies better using metrics specific to the technology sector. This strategic shift reflects our commitment to diversifying the market and embracing the growing tech ecosystem.
Yawar: How can people contact you?
Rajeeva Bandaranaike: To reach us, visit www.cse.lk or search “Colombo Stock Exchange.” We respond to all inquiries within 24 hours.
Yawar: What is your favourite Sri Lankan dish?
Rajeeva Bandaranaike: As an enthusiast of Sri Lankan cuisine, I particularly relish our traditional rice and curry dishes, which are known for their bold, spicy flavours. The distinctive taste is so compelling that even during overseas travel, I seek authentic Sri Lankan curry after just a few days away.
Yawar: What advice do you want to give anyone out there?
Rajeeva Bandaranaike: Success is fundamentally driven by passion. Without genuine enthusiasm for your work, achievement remains elusive, regardless of effort. True accomplishment stems from an inner drive that propels you forward. My journey is a testament to the power of pursuing what genuinely excites and motivates you.
