* Huge encouragement for the Colombo Stock Exchange- CSE Chairman Krishan Balendra
* Foray into equity, bond markets, measure to stabilize currency peg - CB Governor Ajith Nivard Cabraal
By Ravi Ladduwahetty
Khazana Nasional Berhard, the investment holding arm of the Government of Malaysia, yesterday acquired the 8.4% equity stake in premier diversified blue chip conglomerate John Keells Holdings PLC for Rs. 14.5 billion where 71 million shares crossed the floor of the Colombo Stock Exchange in one of the largest market transactions in recent times.
Market indices shot up with Colombo Stock Market’s turnover boosting over Rs.5 billion, initially when 23 million shares changed at Rs.194 per share. Sources close to the deal said that a representative from Bank of America’s Merryl Lynch’s Director Investment Banking (Khazanah Nasional’s stock broker) Sharhan Muhseen, was in Colombo to execute the deal. The deal was expected to go through on Friday as The Island reported the previous day.
Foreign Fund Managers have evinced keen interest in the Sri Lankan equity markets of late where they have sourced value and the current buying was a huge encouragement in the current context of the market, an elated Chairman of the Colombo Stock Exchange Krishan Balendra told The Island Financial Review yesterday
Balendra who is also President of John Keells Capital, said that the interest evinced by the Foreign Fund Managers in John Keells Holdings shows the level of confidence in the valuation of the JKH share and the general valuation of the Sri Lankan equities market. This is a very positive development as they are one of the long term investors who have looked at positively at the Sri Lankan equities market.
John Keells Stockbrokers CEO Thivanka Ratnayaka said his firm facilitated the trade as the lone sponsoring broker for the buyers while it was among one of the 25 plus brokers for the sellers. The entry of a new Foreign Fund of the stature of Khazanah was a positive sign for the country and a source of encouragement for the Sri Lankan equity market.
Central Bank Governor Ajith Nivard Cabraal had said the deal was part of the several forays into equity and bond markets that would help stabilize a currency peg. The Sri Lankan rupee had opened stronger yesterday below 124 to the US dollar, from a close of 125.00/25 on Thursday.
Central Bank’s Superintendent of EPF Kalyani Gunatilleke said: "The enormous profit that the EPF made has brought in the much needed liquidity to the market which was very thin before while also propping up investor confidence
Responding to criticisms that the government was selling this EPF stake to set off the losses in defending the rupee against the dollar and also allegations that the EPF was recouping losses sustained from the earlier market transactions of buying equities of other blue chips whose prices have dipped, she said: "Sri Lanka has the freedom of speech and anyone can say anything. The EPF was a professionally run outfit and we thought that this was the best time to sell the JKH stake at a huge profit. That also brought in the market confidence and the liquidity, she said
Khazanah Nasional Berhad is the investment holding arm of the Government of Malaysia entrusted to hold and manage the commercial assets of the government and to undertake strategic investments.
Khazanah was incorporated under the Companies Act 1965 on September 3, 1993 as a public limited company. The share capital of Khazanah is owned by the Minister of Finance, a body corporate incorporated pursuant to the Minister of Finance (Incorporation) Act, 1957. Khazanah has a nine member board comprising representatives from the public and private sectors. Najib Tun Razak, the current Prime Minister of Malaysia is the Chairman of the Board of Directors. Khazanah has stakes in more than 50 companies with assets valued in excess of RM (Malaysian Ringgit) 113 billion.
source - www.island.lk
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