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Bourse buoyed by strategic buying, foreign interest and dividend news

The market, which has been picking up slowly over the last few weeks was given a timely boost by the release of the quarterly results showing improved earnings from the dismal results of the previous quarter. This has reawakened "sleeping investors" to the fact that the economy is showing signs of an upturn sparking much interest in selected stocks and sectors.

High Networth Individual looking for strategic stake in Richard Peiris A High net worth individual has shown interest in local conglomerate, Richard Peiris. The opening day of the week saw him pick up 2.1% stake and then added another 1.3% to his portfolio. The seller in both instances is believed to be Asia Capital. Richard Peiris has been in the news over the last few months with Dr. Sena Yaddehige acquiring a strategic stake of 29% and the Captains selling out their stake in the company.

Strategic buying in Lanka Walltiles

During the first two days of the week over 9% equity stake of Lanka Walltiles Limited changed hands contributing nearly Rs. 39 million to the turnover of the bourse. The share jumped 17% to close the week at Rs. 21.

The buyer is believed to be a high net worth individual and the seller John Keells. The middle of the week witnessed foreign activity in the form of "foreign crossings" in John Keells and NDB. The two companies accounted for 81% of the day's turnover on a day when retail investors and institutions maintained a low profile.

DFCC announces first and Final Dividend of 50%

On the back of a 25% increase in 3rd quarter net profit results and in the wake of an expected increase in year end results DFCC has announced a 50% first and Final dividend. This announcement follows many other companies that have been announcing dividends over the last two weeks signalling "across-the-board" improved performance over the first quarter of the year.

Seylan posts first quarter results - Net profits up 282%

On the back of a weak performance in the first quarter of last year Seylan Bank recorded an increase of over 10% in interest income, a marginal drop in interest expense resulting in an increase of over 40% in net interest income. Despite an increase of 88% in the loan loss provision the bank posted a net profit of Rs.137 million compared to Rs.35 million in the first quarter of the previous financial year. In response to the results the share ended the week up 8% at Rs.28 contributing Rs.11 million to the closing days trading.

The ASPI, which opened the week at 613.4 gained over 9 points to close the week at 622.5. Turnover for the week exceeded Rs.450 million with foreign activity accounting for almost 20% of the total turnover.

The sectors at the receiving end of revitalised interest were the manufacturing, banking and diversified sectors.

Improved performance by companies and the forecast of resurgence in the economy have prompted renewed strategic interest in several companies, specially the manufacturing sector, which would be one of the sectors to benefit from an economic recovery.

Daya Apparels get Sevanagala Sugar - Subject to Cabinet approval The government's 90% stake in Sevanagala Sugar Industries Ltd. was awarded to Daya Apparels in partnership with China's Xiangnan Luo. The bid, which amounted to Rs.550 million, is subject to Cabinet approval. This sale is part of the government's privatisation program to raise Rs. 21 billion. Other contenders for the stake were Master Divers, Distilleries Company of Sri Lanka and Season Grow Holdings (Pvt.) Ltd.

Business Community heralds end of power cuts

It is heartening to note that the government has arrested the power crisis and provided uninterrupted power, which is a prerequisite for economic development. This is indicative of the government's commitment to the recovery of the economy.

Though the recent increases in electricity rates would affect the power intensive industries, with the economy looking toward a recovery companies would be in a better position to counteract the increases. The power cuts which have been disadvantageous to certain industries such as the food and beverage sector will be given a boost, as the wastage due to spoiling will be limited with uninterrupted supply of power.

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