The Hon. (Dr.) Anil Jayantha – Minister of Labour and Deputy Minister of Finance and Planning

¶ 01 With respect to capitalization and mobilizing capital through the stock market, at the time we assumed office the values were comparatively low; since then, they have doubled. We must further strengthen capital formation through the stock market.

¶ 02 01. Since the President assumed office, from 21 September 2024 when the ASPI was at 11,096, it has risen, as of today in 2026, to 23,956, marking a historic peak in the ASPI. Daily turnover has also roughly doubled in that period, indicating increased market activity and investor participation.

¶ 03 02. Regarding the recent incident of concern—an abrupt price rise and a temporary halt in market operations—we resolved it on the same day. Generally, all trades at the Colombo Stock Exchange are conducted through the Automated Trading System subject to rules including price controls. However, consistent with practices in many exchanges, on the first trading day following an IPO, the price is discovered by market demand and supply without price bands. Therefore, no price controls apply on day one.

¶ 04 On 07 January 2026, after the IPO of a new company—Wealth Trust Securities Limited—its shares commenced trading on the CSE. The IPO price was Rs. 7 per share. There was very high investor demand. In the pre-open session, the system received substantial buy orders, while IPO allottees placed sell orders at high prices. Buy market orders significantly exceeded available sell orders, and some participants entered sell orders at prices such as Rs. 25,000 during the pre-open. As a result, trading opened at an abnormally high price of Rs. 25,000. Identifying this as an abnormal trading event, the CSE suspended trading to prevent contagion.

¶ 05 03. Thereafter, following discussions between the Securities and Exchange Commission of Sri Lanka (SEC) and market intermediaries, all trades executed on that day in respect of the relevant security were annulled to remove adverse effects and minimize systemic risk. The prompt actions of the SEC and CSE preserved market fairness and credibility. The SEC has commenced a full investigation; if wrongdoing by any persons is established, appropriate legal action will be taken.

¶ 06 04. The order entries in question were, on their face, within CSE trading rules; however, the investors who placed the initial extraordinary-priced orders have been identified. The SEC is investigating whether any such orders were based on any improper internal rationale contrary to accepted market conditions, whether any criminality is involved, and who bears responsibility. The SEC aims to conclude the investigation expeditiously.

¶ 07 05. A special SEC meeting was convened on the same day to discuss the event. As an immediate measure to prevent recurrence, the SEC decided to disallow market orders on the first trading day of a security post-IPO as a temporary step. Additionally, the SEC has updated its 2025–2035 strategic plan, with short-, medium- and long-term development objectives across 12 activity areas to be implemented going forward, including initiatives to increase listings, targeted outreach, investor education, and, with the Ministry of Digital Economy, the use of technology to broaden access and participation.

¶ 08 06. A new listings project is underway, with targets and awareness programmes to expand IPOs in 2026, alongside several technology-driven measures in collaboration with the Ministry of Digital Economy.

¶ 09 Thank you.