Expolanka Founder/CEO Hanif Yusoof called the stock exchange to take steps to implement long overdue reform in the capital markets. Expolanka’s parent company feels that the valuation brought about in Sri Lankan capital markets does not reflect the underlying value of the business. The parent company SG Holdings Global Pte Ltd has opted to purchase over 18 million shares in the open market since September 2.
Yusoof said concerning the purchase, “They believe in this company. They believe the share price does not reflect the value of the company. ‘If I was in another country my price to earnings would be better than it is now’.”
Yusoof was speaking on September 8 on the Newsline program. Yusoof has been preventing a swift exit from the Sri Lanka capital markets due to a sense of national duty. He said, “Deep down they also know they respect my wanting to be a Sri Lankan company and a Sri Lankan brand.”
The stock exchange has for long periods been promising a dollar-denominated board allowing all listed Sri Lankan shares currently quoted in LKR to be traded instead in USD. Yusoof said, “I hope the reforms keep coming so that I can tell them that the reforms are coming.”
Given the delinking of the depository system from the trading platform, this is just a matter of developing a USD-denominated clearing system which can begin as a simple settlement system based on prepayments. Yusoof criticized protectionist policies. He said, “Trade can’t develop if the supply chain is as restricted as it is here. They need to be able to operate freely. This is a marketplace.”
Yusoof noted that Sri Lanka was operating well below its potential in terms of logistics. He said, “We have restrictions in energy, construction, and even footwear. At the very least on logistics, we need to globalize. This is where the East and West shipping lines all cross. Dubai on my West
doesn’t even have that benefit and yet all the foreign companies are there.” Yusoof added that various regulations to this date exist preventing any real competition in the business. He said, “Sri Lanka today in my category is still a monopoly style business.”
Yusoof critiqued Sri Lankan conglomerates as only really existing due to highly protectionist policies. He said, “Rather than being a jack of all trades and master of none I decided to focus on one. I wish they allowed foreign participation. I was only allowed to grow because I somehow got foreign participation.”
He added, “I would like to see in my lifetime that when I go to Katunayake airport we will see international logistics brands doing business here. International airlines doing business here.” Yusoof called for the implementation of the national export strategy.
Categorizing his meteoric rise from very humble beginnings he said, “Those days we had nothing to lose. We always went with a positive attitude and that has worked for me.” Shipping and air freight charges which are the main revenue streams of the business have been dropping sharply. (DP)
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