How to invest in share market in Sri Lanka – Beginners guide

How to invest in share market in Sri Lanka became a most answered question since the start of the pandemic, Most of us started working from home and that paved the way for the increased interest in investing in the Colombo stock exchange, This article is for absolute beginners, we made it simple as possible for the new investors.lets look at How to invest in share market.

The Stock market or share market is an ocean and it’s not possible to learn every aspect of its components and how it is operating, if you are going to take a decision of “I am going to study everything about the stock exchange, then I will start investing”,  then the chances of you getting started is going be low as it’s not possible to study the entire stock market. 

These are the simple steps to start investing in the big corporate’s in Sri Lanka.

Find a stock broker of your preference and convenience

You should have a stock broker to buy and sell shares in the Colombo stock exchange, there is approx. 20+ registered stock broker firms available, find a stock broker who will provide you valuable insights about the share market movement. A stock broker will play the intermediary role between you and the stock exchange. Make sure to do a small research about the stock broker and the facilities they provide. online trading facility and daily, weekly research insights are much required to start as a new bee.

To find information about stock brokers: Click Here

Open your Trading account and CDS Account

Nothing to worry about, just fill in the application forms and submit to your stock broker, they will do the needful. Colombo Stock Exchange made it easy with the new digitalisation initiative and just download the CSE app from the Play store or App Store and you can open your trading account using the app. 

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Start investing with small amount

You are all set to start buying and selling shares Once your account is active, don’t be in a hurry to buy and sell shares, select few companies and invest a small amount and observe, most of the stock brokers will advise you to use the online trading, or you can call your stock broker and ask them to buy or sell your preferred share.

I would recommend you to do some random buying and selling to familiarise your self  with the process, there is a big different between investing and trading and you will understand it with practice.

Learn the basics while you invest

Don’t be greedy to get immediate returns from your share investments, there are day traders and there are investors, day traders used to buy and sell within short period as the prices fluctuate. The investors will observe the condition and the potential of the stocks.

Day trading is riskier and investing is ideal for the current context. Spend your time in studying the patterns of the stocks and understand the market risk. Remember, don’t burn your finger by investing all your savings in stock market. Patients will bring you rewards, start increasing your investment in strong companies when you think you have acquired sufficient knowledge.

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What is the alternative you have?

if you are afraid to start investing on your own, you can consider investing with a unit trust company to manage your investments. Unit trust companies are a professional fund management companies, they wil pool your funds with other investors fund and invest in various stocks as a portfolio investment. The advantage of unit trust is they are professionals and they know all the market techniques to minimize your risk, but you will not have any control over your investment.

I must quickly remind you that this is a simple guide to start investing in share market and you have to learn a lot to master the art of investing in stocks. You have to learn about different type of boards, different types of indices and different types of stocks. But, starting is important and the little information I provided above is sufficient enough to start and roll.

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Disclaimer: The information contained in this article is for informational purposes only, should not be considered as an investment advice. Always make sure to do your own research, talk to your financial advisor and/or seek independent advice where appropriate & necessary.


Kathirnathan Ragulan

Kathirnathan Ragulan is the founder of and a serial entrepreneur, Business Consultant, Wealth Tech entrepreneur, Personal Finance & Debt Management Expert with over a decade of banking and investment industry experience.

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