Best Stock Brokers in Sri Lanka

Sri Lanka has transitioned from a rural economy to an urban business center. Be a part of its growth and invest in the Sri Lankan stock market. To do that, you need to find the best stock brokers in Sri Lanka that you can trust.

Get started now with a look at the best stock brokers in Sri Lanka with this article by Benzinga.

Quick Look at the Best Stock Brokers in Sri Lanka:

• Interactive Brokers
• IG
• First Capital
• John Keells Stock Brokers
• Acuity

Best Stock Brokers in Sri Lanka

Take a look at the brokers that made our list!

Broker 1: Interactive Brokers

Interactive Brokers is perfect for serious traders with advanced knowledge. With both inactivity fees and an intricate pricing system, IB should only be used by investors who trade frequently.

Interactive Brokers lets investors trade from Apple or Android devices. The mobile platform provides excellent quality, several news feeds, accounts, watch lists, trading options, notifications and more.

If you’re serious about the trades your making, Interactive Brokers is everything you’re looking for in a broker. Its low margin rates, low commission on high-volume trades, high interest paid to idle cash in your trading account and elite tools and platform offers a unique experience to the right type of investor.

Broker 2: IG

Novice traders will love IG’s intuitive mobile and desktop platforms, while advanced traders will revel in the platform’s selection of indicators and charting tools. Though IG could work on its customer service and fees, the broker is an asset to new traders with its streamlined interface.  

IG’s mobile app continues its commitment to simplicity. It offers full trading capabilities in a streamlined, powerful platform.

Creating an account with IG is fast and simple, even for those who have never opened a brokerage account. You can complete the entire process online, and IG’s intuitive signup system will assist you in uploading identity verification documents and linking your bank details to fund your account.

IG offers a complete selection of live webinars to supplement your learning. Webinars are available at all skill levels and are free to all account holders. Some upcoming webinar topics include a Trading Masterclass on how to use IG’s platform most effectively and MACD Trading Strategies, an introduction to the MACD indicator and how to use it.

Broker 3: First Capital

First Capital Holdings PLC is a full-service Sri Lankan investment bank that offers order execution on the CSE. You can also invest in 5 different Unit trusts.

This broker best suits investors focused on fixed-income and bond transactions. First Capital serves institutional investors and individual asset management with tailored wealth management solutions. 

First Capital offers extensive research with a Daily Market Watch, an Economic and Fixed-Income Research report, strategy reports and corporate equity research. The company also provides actionable trading recommendations through its periodical market commentary reports and other publications.

First Capital’s online platform is from ATrad and includes a mobile app available for Android and iOS devices. Commissions related to the CSE, CDS, SEC and government levy are consistent with other brokers in Sri Lanka.  

Broker 4: John Keells Stock Brokers

John Keells Stock Brokers is 1 of the leading brokerage houses in Sri Lanka. The company has decades of experience in the region and has handled some of the largest and most significant transactions in the history of the CSE. 

John Keells has an excellent research facility that includes Premium Research, Routine Research and a Research Library. The company’s research unit also offers country, sector and company-specific data, as well as other value-added services. 

In addition, you can access online trading powered by DUInvest. Download its trading software using a desktop Trader WorkStation (TWS). You can find the mobile app on Android or iOS.   

Commissions due to the CSE, CDS, SEC and government levy are the same as other brokers from Sri Lanka, while the broker’s trading commissions for less than 100 million LKR are 0.64% and 0.2% for over 100 million LKR. 

Broker 5: Acuity

Acuity Partners is a full-service investment bank operated as a joint venture between DFCC Bank and HNB. The broker’s subsidiaries include Acuity Corporate Finance, Acuity Securities Ltd., Acuity Stockbrokers Ltd., Lanka Ventures PLC and Guardian Acuity Asset Management Ltd. 

The broker offers asset management, corporate finance, fixed-income securities and a stock brokerage service for the CSE.  In addition, Acuity offers a number of unit trusts with relatively high yields. The Guardian Acuity funds include an equity fund, a money market fund and a money market Gilt fund. 

While you can't trade online with Acuity, this broker is ideal for investors looking for long-term, fixed-income and unit trust investments. Acuity also provides clients with high quality research and analysis in capital markets. Commissions due to the CSE, CDS, SEC and government levy remain consistent with other Sri Lanka brokers.

What You Need to Know About Investing in the Sri Lankan Stock Market

Sri Lanka expects to continue to attract foreign investment by improving its infrastructure and strengthening its democracy with the support of the World Bank. The principal stock market in Sri Lanka is the Colombo Stock Exchange (CSE) located in the nation’s capital of Colombo. 

All foreign institutional and individual investors must open a Securities Investment Account (SIA) with a custodian Sri Lankan bank. You must also open an account with the Sri Lanka Central Depository System (CDS) and submit a Know Your Customer (KYC) form with your custodian bank. You also need to provide the customary personal identification documents like your passport or another form of government-issued identification. 

This process generally takes 2 weeks for institutions or 2 to 3 days for individuals upon submission of all required documents. Custodian banks most often used by foreign investors and traders to open SIA accounts in Sri Lanka include Citibank, Deutsche Bank, HSBC and Standard Chartered Bank. 

Sri Lanka does not impose capital gains tax on securities traded on the CSE, but a 10% withholding tax is charged on dividends. Stockbrokers, investment advisors and the stock exchange in Sri Lanka is overseen by the Securities and Exchange Commission of Sri Lanka (SEC). 

The CSE consists of a fully-automated exchange linked live to the CDS. The exchange is open Monday through Friday from 9:30 a.m. until 2:30 p.m. with a pre-market opening at 9 a.m. The CSE system is completely dematerialized, which means that all equity and stock certificates are held electronically in your SIA. 

Once you’ve opened the appropriate SIA account, you can select a broker to execute your orders on the CSE. Not all brokerages are created equal, so make sure to carefully consider your needs before opening an account.

What to Consider Before Investing

Online brokers do make investing simple, but you still need to give careful consideration before you make a move. Before you get into the Sri Lankan stock market, you should:

• Develop a plan or strategy. If you have not developed a plan, you can research the market yourself or rely on a professional broker based in Sri Lanka that will generally have its own research department.
• Test your plan. Once you have developed your own or acquired investment or trading plan, you should test it either manually or in a virtual trading account, if possible. Some stockbrokers offer these accounts for you to demo their trading software and platform that can also be used to test your plan.
• Select your stock or bond. Your investment plan should include funds from diverse industries or sectors; your trading plan involves selecting a trading strategy that considers stock performance. Choosing the securities to invest in or trade requires substantial research and market analysis. 
• Consider foreign exchange risks. When you invest in stocks and other instruments abroad, always factor in the exchange rate risk. Investing in assets not denominated in the currency where you live means that you’ll have to convert the foreign currency derived from your investments into your local currency. The Sri Lankan rupee (LKR) is the national currency of Sri Lanka, and it currently trades at roughly 303.32  rupees per U.S. dollar.  

Next Steps to Find the Best Stock Brokers in Sri Lanka

Sri Lanka presents an interesting investment opportunity. As a developing economy, Sri Lanka investments tend to involve added risk and result in the long- and medium-terms. Near-term gains have been somewhat muted since investment interest in the island nation has recently declined. 

Geopolitical concerns have affected Sri Lanka, and investment in its stock market might not be for everyone. Consider the dynamics of the region and do your research before you take on the associated risks. Connect with a trusted broker to learn more about investing in the Sri Lanka stock market today.

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