Dialog entry to add value to CSE
by Channa Kasturisinghe
Dialog Telekom which will make its debut on the Colombo Stock
Exchange today is expected to have a significant impact of the overall
performance of the market and analysts believe that the All Share Price
Index could even top 2000 points.
Dialog Telekom shares which were offered at Rs. 12 by way of the IPO
are expected to trade at a price range of Rs.14 to 18 at the market
according to analysts.
"We expect every one rupee movement of the dialog shares to move the
ASPI by about 15 points," said Angelo Ranasinghe of Bartleet Mallory
Stock Brokers.
"Dialog IPO was heavily oversubscribed mainly due to the interest
shown by the foreign investors. We expect the foreign investor interest
will still remain at the secondary market. This is a highly liquid stock
with the largest market capitalisation. Entry of Dialog Telekom shares
will undoubtedly add value to the Colombo stock market," he said.
Vajira Premawardana of Lanka Orix Securities said that he would not
be surprised if the ASPI would even top the 2000 mark after today's
trading due to Dialog's entry into the market.
Analysts said that although they expect a huge demand as far as the
foreign investors are concerned the retail sector will respond according
the share price.
"If the share price is high the retail sector will be largely on the
selling side.
We don't expect the Qualified Local Institutional Investors to show
much of an interest as they got the lion share from the IPO which is
about 80 percent," Harsha Fernando of SC Securities said.
According to HNB Stock Brokers weekly review Dialog's entrance to the
market could create further interest towards the telecom sector and they
expected SLT to remain in strong investor appetite.
"Both indices are likely to be in positive territory during the week,
with the All Share Price Index (ASPI) outperforming the Milanka Index.
Dialog's price movements would be initially seen only in ASPI as it is
yet to be included in the Blue chip Milanka index," HNB Stock Brokers
said.
SLT shares drop
Meanwhile, the share prices of the other telecommunication sector
player on the stock market, Sri Lanka Telecom Ltd., dipped sharply
yesterday resulting the ASPI also to decline by about 13 points. The
shares dropped from Rs. 24.50 to Rs.23.25 yesterday.
According to analysts share prices declined following the Appeal
Court on Monday quashed Sri Lanka Telecom's 2003 tariff increase, which
raised monthly rentals to Rs. 500.
The ruling requires SLT to revert back to pre-2003 tariffs and refund
the difference in its customers bills for the entire period.
However, last Friday's gain in the market was mainly due to the rise
in SLT shares.
Approximately 6 million of SLT shares trade for the week, of which
nearly 3 million came on Friday alone. |