Friday, February 24, 2012

Deals on Dhammika-controlled firms bolster Bourse

Rebound in stock market continues as year to date negative return now reduced to single digit; market cap back at Rs. 2 trillion level

RELATED party transactions involving top investor Dhammika Perera-controlled Hayleys, Royal Ceramics and LB Finance executed by his friend and Director Nimal Perera bolstered the Colombo Bourse yesterday with year to date negative return now trimmed to single digit.

 In deals worth over Rs. 2 billion accounting for 60% of the day’s turnover,  Dhammika bought under his personal name 2.8 million shares in Hayleys (3.7% stake) held by Royal Ceramics for Rs. 1 billion whilst he sold his personal 10% stake in LB Finance to Royal Ceramics. Hayleys share was done at Rs. 380, the same price as the recent most mandatory offer whilst LB Finance stake amounting to slightly over 7 million shares was done at Rs. 150 each.  The transactions were part of realigning the respective investment portfolios. Dhammika has been picking up Hayleys quantities from the market apart from some of those held by RCL and its Managing Director as well as Hayleys Director Nimal Perera.

Dhammika's investment holding firm Vallibel One owns controllin (51%) stakes in both RCL and LB Finance. Despite yesterday’s sale of 10% stake in LB to RCL, Dhammika continues to hold a further 10%. RCL's stake in LB Finance, the fastest growing finance company, is around 15%.These deals apart the rest of the market remained robust with continued interest from institutional and retailer players.

The ASI gained by over 1% thereby reducing its year to date negative return to single digit level of 9%, substantially lower in comparison to over 17% a week ago. The market capitalisation too made a welcome return to Rs. 2 trillion mark after having sunk to Rs. 1.8 trillion mark on February 14.

 Aitken Spence also emerged strong as the counter also recorded 10 crossings carrying a total of 4.3 million shares (generating a turnover of Rs. 517 million) being dealt at a negotiated price of Rs. 115 per share. Meanwhile, interest also continued in John Keells Holdings as it advanced by 1.9% to close at Rs. 177.2.

 Foreign investors were net buyers of shares worth Rs. 530 million, extending the net foreign inflow to Rs. 2.81 billion so far this year.

 Apart from blue chips, investors’ retail chase continued in Environmental Resource Investments and its Warrants, Blue Diamonds [non-voting] and Colombo Land and Developments. Arrenga Capital said amidst some struggle during very early trading, market managed to remain in the green for the sixth consecutive session, denoting a massive 498 points gain over the past six trading days.

 Gains were recorded across the board as the days gainers’ outperformed losers’ by 91. Following the rally benchmark index advanced as much as 115.2 points at its high point of 5,536.2 points.

 Overall participation levels of the bourse were energised by few heavy deals that took place in selected blue chips as the day saw a total of 88.2 million shares being traded, whilst the turnover crossed Rs. 3.7 billion -highest recorded since 01.12.11.

 NDB Stockbrokers said foreign interest in fundamentally sound counters remained with net foreign buying continuing.

 Diversified sector was the highest contributor to the market turnover (due to Aitken Spence, John Keells Holdings and Hayleys) and the sector index gained by 1.37%.

source -

No comments: