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The last week saw the bourse record a turnover of Rs. 749.2 million at a daily average of Rs. 149 million. The ASPI and Milanka indexes recorded marginal decreases of 4.2 points and 3 points to close at 720.4 and 1,256 points respectively. The market was boosted by the ongoing battle for control in Asia Capital and Richard Peiris with the two companies accounting for over 55.5% of the week's turnover.

More drama for Asia Capital Chinkara Stake believed to be 19% The two companies which are now almost inseparable with the ongoing battle for control of RPC having spilled over to Asia because of the cross holdings. The opening day of the week saw a 13.4% stake or 14.8 million shares changed hands at Rs. 19 per share as things heated up in the ongoing tussle for control. The buyers were Chinkara Group, who is now believed to have more than 19% in the company and the sellers were rumoured to be Rusi Captain and connected parties and Mr. Ajith de Fonseka. Long-standing shareholders of the company have been slowly selling out of the company making a tidy profit with the share currently trading at Rs. 7 over its book value of Rs. 9.80.

Foreign Fund picks up 800,000 shares in Asia Capital

The penultimate day's trading saw 800,000 shares of Asia believed to be a transfer from Chinkara to a foreign fund. The sale was at a price of Rs. 17.25. Chinkara having purchased a 13.4% earlier in the week is now expected to claim a board seat. It is alleged that Dr. Yaddehige and SC Capital may work together and is interesting to see how the existing shareholders will side in this power struggle, which originated in a bid to gain control of RPC. Asia Capital was the top revenue generator for the week with Rs. 368.1 million, which was 49% of the week's total turnover and closed at Rs. 17 an increase of 13.3% from the previous weeks closing of Rs. 15.

Battle for Richard Peiris continues

Shares of RPC on offer continues to be snapped by as the battle for control heightened with a 1.2% stake or 296,900 shares in the diversified conglomerate changed hands on Monday at Rs. 140. It is rumoured that SC Capital was the buyer and that Rusi Captain, and connected parties and Investor Access Asia were among the sellers. The 20% holding of Asia Capital is vital for the Peiris' family to maintain controlling interest in the company and it is of paramount importance to them as to the final shareholding of Asia. The RPC share gained Rs.1 during the week having opened the week at Rs.145 and accounted for a total turnover of Rs. 48 million.

HNWI disposes stake in Connaisance

Another significant contributor to the opening day's turnover was Connaisance Ltd. When HNWI, Asia Capital's CEO Dirk Flamer Caldera sold his personal stake of 2.2 million shares at Rs. 5.50 for Rs. 12.5 million although in the previous trading day the stock was trading between Rs. 6.00 and Rs. 7.25. The 12.5% stake was believed to have been picked up by several individual investors. The company has been making losses in the last few years due to the heavy debt burden and the current crisis in the tourism industry. The share generated a total turnover of Rs. 13.3 million closing at Rs. 7 down marginally 3.4% from the previous weeks closing of Rs. 7.25.

JKH sole bidder for Bunkering monopoly

In a rather disappointing end to the much-anticipated bid for Sri Lanka's bunkering monopoly JKH was the only bidder in contention was supposed to bid on July 12, 2002 through the Bourse's "All or Nothing" window. The other bidders had backed out after the floor price of Lanka Marine was approved by the Cabinet at Rs. 1.2 billion. This they alleged was higher than the price they had valued the profitable company, which in the last financial year made a net profit of over Rs. 150 million and turnover averaging Rs. 1.2 billion.

JKH Shares actively traded in anticipation of LMS purchase

Over the last week the diversified blue chip was at the receiving end of a great deal of retail buying interest as the news broke that JKH was to acquire the country's bunkering monopoly. The share was actively traded generating a total turnover of Rs. 32.5 million for the week with the share price closing at Rs. 67 having increased Rs. 2 or 3% from the previous week's closing of Rs. 65 due to the heavy buying interest in the conglomerate.

Commercial Bank takes firm standing on maximum shareholding percentage

Commercial Bank is one of the best performing and most profitable quoted Corporate's in the country. As the decision on the divesture of the Sri Lanka Insurance Corporation's (SLIC) 29.5% stake in the bank draws near, the bank took a firm stance as to the maximum shareholding of a single investor and connected parties could acquire. As per the Banking Act a party together with their nominees can hold only 10% and anything above that would require the Monetary Board approval. The management of the bank announced their intention of enforce this act and would not register shareholdings above this limit. DFCC and SLIC both hold above 10% but their stakes were approved by the Central Bank.

As HNWI's continued to increase stakes in the bank

The share was actively traded during the week with Captain connected parties rumoured to be gathering a significant holding in the blue chip. It is believed that the Captain family who recently increased their stake to 8.5% has in the last week picked up further voting and non-voting shares. The voting share accounted for Rs. 34.4 million of the week's turnover and closed at Rs. 200 having gained Rs. 4 or 2% in the last week. The non-voting share closed for the week at Rs. 127 down 75 cents from the last weeks closing having recorded a turnover of Rs. 30.5 million.

Foreign buying in James Finlays

Among the other stocks that saw strategic stakes changing hands was James Finlays. A foreign HNWI already believed to have a substantial stake in the plantation rich conglomerate picked up a further 250,500 shares or a 0.7% stake at Rs. 33. The share closed for the week up 3.8% or Rs. 1.25 at Rs. 33.50.

BOC rated SLAA- by Fitch

Sri Lanka's credit rating agency, Fitch assigned the Bank of Ceylon SL double A minus national rating for Implied Long-term unsecured Senior Debt. This rating denotes a very low expectation of credit risk. The rating indicates a very strong capacity for timely payment of financial commitments and that this capacity is not significantly vulnerable to foreseeable events. The bank enjoys a dominant market share of most commercial banking activities and a leading share of deposits. The rating also recognises increasing loan loss reserves and relatively better provisioning standards compared to other domestic banks. Whilst concerns regarding the adequacy of such provisions still remain, concerns also hinge around the government's propensity, especially during times of fiscal weakness, to fund state owned entities and its own deficit. The state bank recorded a net profit of Rs. 893 million in the year 2001.

Seylan Bank Announces Rs. 300m Debenture Issue

Last week Seylan Bank announced a debenture issue for Rs. 300 million with an option to increase the issue to Rs. 600 million. These debentures will be offered with three interest rate options. Two fixed rate options of either monthly interest rate of 14% per annum or an annual payment at 15%. The third rate is to be a floating option of 11/2% above the simple average of the one-year weighted average Treasury Bill rate that will be subject to a cap and a floor.

The funds raised will primarily facilitate the increased capital adequacy requirements needed by the year 2003 and enable the bank to expand its medium and long term lending portfolio. Despite difficult economic conditions in the previous financial year, Seylan was able to record a marginal increase of 2% in post tax profit of Rs. 241.5 million. The first quarter of 2002 saw the bank record an increase of over 280%in post tax profits of Rs. 137.3 million compared to the previous year's profit of Rs. 35.9 million. The share closed for the week at Rs. 36.75 down 25 cents from the previous week.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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