Wednesday, November 17, 2010

Distilleries buys 3% more of Spence for Rs. 2 b; Stake now at 28%

Business tycoon Harry Jayawardena-controlled Distilleries Company (DCSL) yesterday picked up a further 3% stake in diversified blue chip Aitken Spence for Rs. 2 billion increasing its holding to 28%.This deal was the only spark in an otherwise bearish market which hit a two month low yesterday.

The block which Distilleries bought amounted to 11.4 million shares transacted via three crossings at Rs. 180 each. In total Spence saw 11.75 million shares traded for Rs. 2.11 billion accounting for 60.45% of the day’s turnover. Spence share price closed lower by 0.34% at Rs. 177.  Seller was Arisag which is now believed to have sold out of Aitken Spence having entered it several years ago with a 10% stake.

This is the latest block to be picked up by Distilleries which in recent months had been increasing the shareholding in stages. Originally it crossed the 20% mark thereby consolidating Spence as an associate followed by buying few more stakes.

Spence in the first half of 2010/11 financial year posted a Rs. 1.04 billion profit attributable to equity holders, up from Rs. 764 million a year earlier.

In a continuing bearish trend the ASPI closed below 6,500 while the MPI closed below 7,000, the lowest levels since mid – September. “Significant positive proposals in the budget may be required to change the current sentiment,” NDB Stockbrokers said.

Due to the strategic deal on Spence the Diversified and Hotels & Travel sectors were the highest contributors to the market turnover. However the sector indices decreased by 0.51% and 0.60% respectively.

The market also saw another three major crossings – 242,800 shares of John Keells Holdings at
Rs. 294; 132,000 shares of Royal Ceramics at Rs. 306 and 2,000,000 shares of John Keells Hotels at
Rs. 21.

Reuters said the bourse dipped owing to foreign selling and persistent funds shortage.

Despite the fall, Colombo remains Asia’s best performer in 2010 with a 92.2% gain.

Low liquidity, caused by the withdrawal of credit by brokerages and funds staying locked up in oversubscribed share offerings, and anticipation of fiscal and tax reforms in the 2011 budget due in parliament on Monday have kept the market subdued.

The bourse is trading at the highest forward price-to-earnings ratio in Asia and global emerging markets at 19.7 times, compared with 13.5 and 12.7 respectively, Thomson Reuters StarMine data showed. The CSE’s 14-day relative strength index is at 41.7, more towards lower neutral limit of 30.

Meanwhile the rupee closed flat at 111.68/70 rupees a dollar as dollars pumped by the Central Bank offset importer demand, currency dealers said.

Carbotels buys 13% stake in Continental from Hayleys for Rs. 583 m

In an in-house deal, Carbotels Ltd. yesterday bought 13% stake in Ceylon Continental Hotel for Rs. 583.4 million from parent Hayleys Plc.

Carbotels which also owns Hunnas Falls, is now a fully owned subsidiary of Hayleys. The stake amounting to 23 million shares was transacted at Rs. 25.50. Hayleys originally bought the stake at Rs. 21. Shares of the owning company of Ceylon Continental, closed at Rs. 26.50, up by 3% over Monday.

source - www.ft.lk

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