The company’s stock price hit an all time high of Rs. 448.90 during the day before settling down at Rs. 436.60, up by a whopping Rs. 67 or 18% on a single session. At its intra-day peak the gain was Rs. 79.30 or 21.4%.
Related party NDB Capital also saw its share price rise by Rs. 40 to record levels.
Exit of Aviva from Sri Lankan operations has been widely speculated for several months now, but the share began to gain only of late, which analysts linked to negotiations nearing completion.
Daily FT learns the deal will be announced this week though the company has been silent so far.
Last week, also on speculation, Aviva NDB share price rose by Rs. 89.30 to Rs. 369.60 whilst it hit a 52-week high of Rs. 380 beating the previous best of Rs. 338. A mere 87,699 shares changed hands via 485 trades for Rs. 30 million whole of last week whereas yesterday’s value was Rs. 24 million.
Analysts said that Aviva NDB price was on the up due to sentiments as sale of control in Lankan entity will not trigger a mandatory offer. The reason being the control of Aviva (87%) is held by an unlisted entity Aviva NDN Holdings Lanka Ltd., a joint venture between Aviva and NDB Group.
Aviva Asia Holdings own 58.4% stake in the JV whilst NDB Group’s NDB Capital (formerly CDIC) holds 41.6%. NDB Capital also separately holds 5% direct stake outside the JV.
Public float of Aviva NDB is only 7.73% whilst there are 2,204 shareholders of whom 1,904 collectively hold a mere 1.69% or 0.5 million shares each below 1,000 and 249 shareholders owning 2% or 0.6 million.
Aviva NDB share price closed the June quarter at Rs. 153 and yesterday’s peak price of Rs. 449 reflected a massive 193% increase within three months. As at 30 June 2012, net assets value per share was Rs. 11.45 at company level and Rs. 112.95 at Group level. Insurance businesses are sold on different valuation.
Also linked to the sale, NDB Capital saw its share price rise by Rs. 39.70 to Rs. 484.30, a new high whilst it peaked to an intra-day high of Rs. 500. Yesterday’s gain was after NDB Capital established a new high of Rs. 460 last week prior to closing at Rs. 444.60, up by Rs. 25. In the previous week ending 14 September, NDB Capital gained by only Rs. 5.90 to Rs. 419.80 whilst at that time, the 52-week highest was Rs. 448.
NDB Capital will enjoy a hefty capital gain if it sells out of the insurance venture.
Related party NDB shares too gained yesterday by Rs. 4.80 to close at Rs. 138.40 whilst it hit an intra-day high of Rs. 139.70 with 492,616 shares traded. Last week NDB share gained by only 70 cents whilst volume of shares traded was 473,164.
In the first half Aviva NDB revenue was Rs. 5.8 billion, down from Rs. 6.96 billion, whilst net profit before tax was Rs. 163.3 million, marginally lower from Rs. 183.6 million in the first half of FY11, which had the benefit of a one-off gain. Its earnings per share was Rs. 5.44 down from Rs. 6.12 whilst dividend per share was Rs. 9.
Assets of Aviva NDB as at 30 June 30, 012 was Rs. 37 billion at Group level and Rs. 36.8 billion at Company level. Liabilities amounted to Rs. 33.5 billion. Total equity was Rs. 3.38 billion inclusive of Rs. 3 billion in revenue reserves.
source - www.ft.lk
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