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Tuesday, April 19, 2011

Free Lanka Capital gains by 20% on debut

Free Lanka Capital Holdings (FLCH) gained by 20% at peak on its debut before closing up 16% with nearly 30% of shares from the offered amount via IPO trading.

After opening at Rs. 5 the FLCH share peaked to a highest of Rs. 6 and touched a low of Rs. 5.50 prior to closing at Rs. 5.80, up by 80 cents or 16%.

Around 89.28 million shares changed hands via 10,344 trades. Included in the trade was a crossing of 5.3 million shares at Rs. 7 each. In the IPO, the Company issued 22% stake amounting to 300 million shares at Rs. 5 each. Of the number of shares issued (1.36 billion), the quantity traded on debut was only 6.56%.

Deals on FLCH boosted the day’s volume at Colombo Bourse to 111.2 million shares. Its Rs. 1.5 billion IPO drew applications worth Rs. 69 billion.

NDB Stockbrokers viewed gain of FLCH as “not up to expectations” suggesting it failed to boost the overall sentiments. However it noted the buying momentum may build up over the next few weeks in anticipation of strong earnings in 2011 first quarter.

On the overall market NDB said indices failed to continue the momentum gathered before the holiday season amidst lackluster investor participation and decline in blue chip stocks.

“Short term rallies witnessed on certain stocks during the week before holidays, dried up as investors turned their focus to the IPO and some illiquid stocks,” it added.

John Keells Stock Brokers said: “The indices declined amid moderate turnover levels with activity."

Asia Wealth Management said market slowed after a 3 day pause closing both the indices on a negative note. ASPI was down by 0.36% whilst MPI dipped in a similar fashion. Turnover was Rs. 2.37 billion helped by a strategic buy of 2.6% stake in NDB Bank by HNB for Rs. 690 million which also resulted in net foreign outflow of Rs. 723 million.

It said Central Finance continued to see institutional and high net worth interest whilst most recently reactivated institutional interest continued in Lion Brewery, with the counter seeing a 100,000 mid-sized parcel being crossed at Rs. 250 per share Ceylon Guardian Investment saw active high net worth and institutional play with heavy index Distilleries of Sri Lanka also witnessing similar interest.

source - www.ft.lk