■ Liberty Plaza owning firm’s share price rockets to 72% with over 15% stake traded among retailers and high networth investors after Friday’s Rs. 835 m investment by Dilith Jayaweera controlled companies acquiring 20% stake
■ Extraordinary gain lands the stock under SEC price band
Colombo Land and Development Company Plc, the owning firm of Liberty Plaza among other assets, yesterday rocked the Colombo Bourse with hectic trading triggering high price gains and volume before landing itself within the SEC’s price band.
Slightly over 31 million shares amounting to 15.5% stake changed hands via 8,184 trades creating the day’s highest turnover of Rs. 955.7 million.
Its share price peaked to a high of Rs. 34.60, up by 72% over Friday’s close of Rs. 20.10 before ending the day at Rs. 31.80, still up by 58% or Rs. 11.70. It also surpassed the 52-week highest price of Rs. 29.60 yesterday. This sharp rise and volume of shares traded during the past few days factored in the stock being slapped with the 10% price band by the Securities and Exchange Commission (SEC) between tomorrow and 30 May.
The stock was under heavy day-trading as well as speculative buying.
Those who exited on the rise are likely to be happier whilst investors who were late buyers may have to be contend with 10% price increase per day of 50% maximum in the next five days if yesterday’s fortunes were to repeat.
On a day when rest of the market was bearish all sector indices declined except the Land & Property sector thanks to play on Colombo Land.
The stock coming under heavy play follows Triad and Emagewise fame Dilith Jayaweera controlled companies acquiring 20% stake on Friday for over Rs. 800 million, with bulk of the shares bought at Rs. 20 each. On Friday a total 41.5 million shares accounting for 21.2% stake of Colombo Land traded for Rs. 835 million. It hit an intra-day high of Rs. 23.60 before closing down Rs. 3 on Friday.
Dilith acquired the stake via Emagewise, the parent of Citrus Leisure and the latter’s subsidiary Kalpitiya Resorts Ltd.
Most of the selling on Friday by Singapore-based investors, who were founder shareholders of CLND. However these foreign investors collectively own an estimated 20% holding. CLND’s other major shareholder Urban Development Authority owns 17.45% stake.
Analysts said Dilith wasn’t on the buying side yesterday whilst except a small block of foreign selling the rest were all local both high networth investors and retailers either on selling or buying side.
As at end 2009, CLND had 2,807 local shareholders with over 1000 owning less than 1,000 shares and an equal number owning less than 10,000.
Analysts speculated that Dilith’s purchase was strategic and the price at which he bought was “very good” given the potential upside for the company in post-war rebound in real estate and property development in and around the city.
The Net Asset Per Share of the company was only Rs. 11.44 as at 31March, 2011 whilst that of the Group was Rs. 13.98, both down from Rs. 13.42 and Rs. 16.54 as at 31 December, 2010. Total Group assets were Rs. 2.86 billion whilst the company’s figure was Rs. 2.3 billion.
Apart from the Liberty Plaza Complex, CLND also owns land at Bodhiraja Mawatha, Colombo 11 where the People’s Park is situated as well as Orukanda Estate in Avissawella where forest plantations project is on-going.
In 2010, the company made a profit of Rs. 7 million increasing the retrained earnings to Rs. 1.94 billion at company level and Rs. 2.4 billion at Group level. In 2009 CLND suffered a loss of Rs. 2.43 million as against a profit of Rs. 5 million in 2008. Company’s profits rose to Rs. 9.6 million in 2009 from Rs. 2.2 million a year earlier. Group revenue was Rs. 90.4 million in 2009, whilst last year it dipped to Rs. 86 million.
In the first quarter of 2011 net loss nearly Rs. 6 million for the Group and Rs. 5.6 million at company level.
In the 2009 Annual Report the company said it was positively looking at launching the People’s Park Stage II development at the car park land at Bodhiraja Mawatha, Colombo 11. It had already obtained the preliminary planning approval from the Urban Development Authority (UDA) and was awaiting the vacant possession being granted of the land occupied by the private Bus Stand to commence ground operations. It had also made representations to the UDA to expedite the land exchange and allocate such alternative lands in lieu of the Pettah CTB Bus Stand property in order to develop a new township project in the Western Province.
Agrispice (Pvt) Ltd the wholly owned subsidiary of the Group, which owns Orukanda estate in
Avissawella has more than 10,000 Mahogany trees and 2,000 Teak trees which have shown a very steady growth and is expected to give a long term yield. In 2009 the company established a budded rubber and a vegetatively propagated tea nursery in order to reduce the impact on the group financials on the recurring expenditure. The expected income from this nursery would cover the annual expenditure which is required to administer the estate.
source - www.ft.lk
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