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Saturday, July 9, 2011

Heavy retail play on Vallibel One on debut

Latest diversified holding to list Vallibel One Ltd. (VOL) on debut yesterday came under heavy retail play dominating trading propelling its share price to a peak of Rs. 38.50 before closing up 22.8% to Rs. 30.70.

■ Nearly 42 m shares change hands via 18,713 trades for Rs. 1.4 b

■ Price peak to Rs. 38.50 before closing at Rs. 30.70, up 23%

■ Ends maiden day with Rs. 33.35 b market cap rank of 18

The first block of shares to go on board was 950,300 shares at Rs. 37.50 done via 69 trades. That start perhaps signalled what was to follow. By end of the day VOL was subject to high 18,713 trades or 65% of the market’s total involving 41.8 million shares generating Rs. 1.4 billion turnover or near 60% of the total.

At peak price of Rs. 38.50, VOL was hovering around as the 13th most valuable and its finish down as 17th was largely owing to retail investor mindset of selling in a declining market booking profit on the slide.

Of the quantity traded there was only one crossing of one million shares at Rs. 37.50.

VOL’s market capitalisation of Rs. 33.35 billion ranked it above Thursday’s debutant Lanka Orix Finance and more importantly Hayleys whose value was Rs. 28.1 billion.

VOL is the first holding company of business tycoon Dhammika Perera consolidating some of his personal and controlling/strategic stakes in Royal Ceramics (51%), LB Finance (51%), Sampath Bank (15%), Delmege Forsyth Group (51%) and Orit Apparel (51%) as well as an upcoming luxury resort in Negombo.

VOL’s Rs. 533 million IPO enjoyed a 11.6 times oversubscription, considered as very high in a regime of limitations on bank guarantee applications, bearish market sentiments and billions of cash stuck in other primary and private issues. The over subscription was also much higher than big ticket issues from Expolanka Holdings’ Rs. 2.4 billion (near five times) and Softlogic Holdings’ Rs. 4 billion (over four times).

The IPO of VOL, which is the first holding company of business leader’s select investments, involved 21.3 million shares at Rs. 25 each. It drew 35,256 applications requesting for 247.05 million shares worth Rs. 6.17 billion.

The debut of VOL however failed to empower a total turnaround in the market as both indices closed the day negative largely on account of quick profit taking.

Diversified sector was the main contributor to the market turnover (due to Vallibel One), while the sector index increased by 1.95%. Expo Lanka also contributed to the gain. The share price gained Rs. 0.10 (0.73%) and closed at Rs. 13.80. Bank, Finance and Insurance sector also contributed significantly to the market turnover (due to Citizens Development Business).

The sector index decreased 1.31%. 1.25 m shares of the Citizens Development Business exchanged hands at Rs. 80 each.

The share price decreased by Rs. 1.40 (1.69%) and closed at Rs. 82.80. Interest on Orient Garments saw the price climbing Rs. 3.20 (12.03%) to close at Rs. 29.90.

source - www.ft.lk