Archives

Banking Sector leads recovery with expectation of economic recovery Bourse records over, Rs. 2 billion turnover for the week

Prices finished higher in strong trading, riding a wave of upbeat sentiment that started with the banking sector and had spill over effects to all other sectors specially the diversified and manufacturing sectors. The bourse recorded a turnover of over Rs.2 billion in a trading week for the first time this year. It is noteworthy that six companies, NDB, DFCC, Asia Capital, Richard Peiris, JKH, Aitken Spence and Commercial bank, accounted for over 80% of the total turnover for the week.

The ASPI closed for the week at 731.2 having gained over 46 points or 6.7% during the course of the week. The MILANKA price Index hit the 1200 mark for the first time since the index was introduced in 1999, closing for the week at 1279.52 up 8.64% from the previous week.

Institutional Buying in DFCC drives price up Rs. 21

Much activity was witnessed in DFCC over the last week with Institutional buying in the blue chip. The last day's trading saw a 3.5% stake or 1.5 million shares changing hands at a price of Rs. 180.50. The seller is Employees Trust Fund Board. The development bank annual results for the financial year ended March 3, 2002 recorded a 17% increase in income and a 37% increase in profits after tax. The bank recently declared a dividend of 50% compared to the 45% dividend announced for the previous year. The share closed for the week at Rs.179 up 13% from the previous week and currently trading at a Price Earnings ratio of 8.84. The net assets value of the share is currently Rs.157.

Commercial Bank sparks buying interest as speculation of sale of Insurance Corporation stake

Commercial Bank, which was the best performing local bank in the dismal economic conditions of the previous year has been in the midst of buying interest as Insurance Corporation which is in line to be privatised has yet to announce whether the Insurance company will be privatised with the controlling stake of 29% in Commercial Bank or if it will be disposed of before hand. In anticipation that the stake will be disposed prior to privatisation the blue chips share appreciated over 7% reaching a week's high of Rs.205 before closing at Rs.200. The bank accounted for Rs.97 million of the week's total turnover.

NDB generates highest Turnover for the week and appreciates 27%

One of the premier blue chips currently trading on the bourse, National Development Bank (ADB) accounted for over Rs.418 million of the turnover generated on in the market this week. Vallible Lanka (Pvt.) Limited, a company owned by Dhammika Perera, the single largest shareholder of NDB along with SC Capital of Singapore is rumoured to have increased their stakes with majority of the purchases during the week.

NDB, which recently bought the local operation of ABN AMRO thereby incorporating NDB Bank, is in the process of a share issue of 40.3 million ordinary shares in the newly incorporated Bank. Mr. Perera, who already has 5% equity in NDB Bank, will gain controlling interest through the controlling shares of NDB. NDB closed for the week at Rs.97 up Rs.20. which is 26.8% higher than the previous weeks closing price.

Tussle for Richard Peiris continues

There has been much interest in the company since Dr. Sena Yaddehige bought John Keells stake of approximately 27% in the company and is currently the single largest shareholder. On the back of this purchase during the last month foreign interest resulted in a further 15% stake believed to be bought by Rock Port Limited, and Sezeka Ltd. The ongoing battle for control in the diversified blue chip escalated during the week as it was rumoured that Asia Capital and parties connected to Dr. Yaddehige were scouting around for shares willing to pay premium prices for it propelling the share to Rs.140 an increase of Rs.40 from the previous weeks trading price of Rs.100.

And Spills over to Asia Capital

Sezeka Ltd acquired a 20% stake in Asia Capital, which currently holds 20% of Richard Peiris, which reciprocally holds a similar stake in Asia Capital. Asia Capital, which is currently trading at a premium of Rs.11.25, generated a turnover of Rs.318.3 million for the week driving the share price up 7% from the previous week.

Veteran Hotelier increases stake in Lighthouse Hotels by 7.6%

George Ondaatjie, who recently bought a 3.2% stake in Marawila Resorts is believed to have increased his current stake of 1% in Lighthouse hotel to 8.6% with Monday's Rs.28.2 million purchase of 3.5 million shares. This move by the respected businessman reflects the growing confidence in the industry and its medium to long-term prospects. A lighthouse hotel was recently the subject of buying by Merril J Fernando who picked up nearly 6% of their equity. The share closed for the week at Rs.9.75 having appreciated 18% during the course of the week.

Managers for sale of 49% stake in Shell Gas appointed

The government of Sri Lanka plans to list Shell Gas Limited on the Colombo Bourse and divest their 49% through an Initial Public Offering (IPO). People's Merchant Ltd and Business Intelligence Ltd have been appointed as the joint managers to the sale. The managers will be responsible for valuing marketing and listing the issue and recommending whether to sell the stake as a single parcel or in trenches. The decision to privatise the company though an IPO was arrived at after the two bids it received were below what the state was on the lookout for. Shell Gas Lanka Ltd. is 51% owned by the Royal Dutch/Shell Group.

Bourse riding on wave of investor confidence

It as evident from the last few weeks that the market was boosted by several strategic parcels that changed hands sparking retail interest in these stocks. It was also apparent that investor confidence had returned with a vengeance, which is a very positive sign for the bourse, which is currently seeking entry into the MSCI.

Development Forum in Sri Lanka for first time

The two-day Sri Lanka Development Forum which was held in Sri Lanka for the first time last week brought together delegates from bilateral and multilateral donors, government agencies, non government organisations and the private sector. The discussions were centred on the government's Poverty Reduction Strategy and the framework for Relief, Rehabilitation and Reconciliation. World Bank, IMF and ADB officials spoke positively of the progress Sri Lanka has made and outlined areas for further development such as transport and road network. Although no firm financial commitment is pledged at such a forum the deliberations and conclusion is considered a vote of confidence in the Government and the country toward achieving its socio-economic challenges and greater financial and technical assistance may follow in this connection. 

News | Business | Features | Editorial | Security
Politics | World | Letters | Sports | Obituaries |

Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
Comments and suggestions to :Web Manager