Business Times

Dilith-dumping is a loser’s term

By Duruthu Edirimuni Chandrasekera

An advertising personality and now a major stockmarket investor - Dilith Jayaweera’s world, does not involve - ‘pump and dump’ of shares – it’s only buying and selling based on informed decisions.
“My company doesn’t pump and dump shares, it buys and sells. The term ‘pumping and dumping’ does not exist for us, as we don’t believe in it and don’t practice it. As far as I understand, it’s a loser’s term,” he said, stressing to the Business Times in an interview that strategic transactions for long-term benefits as well as short-term benefits are all entered into in good faith. He cited his company’s investments in Citrus Leisure PLC and Colombo Land and Development Company PLC as examples of long-term strategic investments.

“Universally, those who come to a stock market are informed buyers and sellers. They are expected to have studied the companies and have a good understanding of market mechanisms and macro fundamentals. This is the Colombo stock market - it’s a small world in Colombo and there is plenty of information available to stakeholders of the Colombo Stock Exchange (CSE). Investors are not like those trading in vegetables at the Manning Market – it is naturally expected that they would be more mature and have some understanding of the risks they face when trading in shares.”

He says that anyone going against these fundamentals, and choosing instead to follow rumours based on a herd instinct, is at their own risk. “In a share market, especially where retailers are concerned, somebody’s gain has to be someone else’s loss. The same way you enjoy happiness when you gain, you must be prepared to accept loss. It is like Buddha’s fundamental principle of Labho Alabho (profit and loss) in Atalodahama,” he added. He also said that the Securities and Exchange Commission’s function is to educate people of the inherent nature of any stock market. “What some may not be aware of is that the so called ‘big investors’ with large portfolios also lose a lot of money during trading.”

Speaking of his last purchase of a stake in People’s Merchant Bank (PMB) Mr. Jayaweera explained, “It’s with a good intention and after advice from reputed stockbrokers that we bought into PMB, as we thought of a possible synergy with a group company. After the purchase, (on the same day) we contacted the rest of PMB shareholders who we thought would sell their stakes to us. Some who immediately agreed to sell, withdrew. In this situation, we lost the prospect of possible synergies and it didn’t fit the original reason for us wanting to buy PMB. So you are left with no choice, but to sell it in the market.” He added that his company has never got into a stock with the intention of artificially creating a story around it and selling.

Discussing his plans for Citrus Leisure PLC, he said that by year end the three star Citrus Hikkaduwa will be ready with extra 45 rooms added, bringing the total to 90 rooms. He added that once the Environmental Impact Assessment is granted, construction would also begin on Citrus Waskaduwa in November. Construction of Citrus Kalpitiya will also start before year-end. “Due to some improvements in its design, the construction was delayed by two to three months,” Mr. Jayaweera added.

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