The Colombo market went into a depression for the first two days of the week due to profit-taking and some selling to meet funds for the Union Bank IPO which closed on day itself being oversubscribed by 225 times but issues abound about the source of funds that come to IPOs.
Another story (Page 1) in the Business Times deals with how IPOs are being snapped up owing to a large number of bank guarantees and not straight cash and that the ‘over-subscription’ is for the wrong reasons.
There has been a steady flow of IPOs since Janiary and more to come. Free Lanka Capital Holding will offer 300 million voting shares at Rs.5 early next month while Waskaduwa Beach Resorts and Kalpitiya Beach Resorts will follow.
On this week’s trading activity, HNB announced a share split of 1-for-2 and a final dividend of Rs.5.50 per share, but this did not create any ripples to its share price. HNB Assurance also announced a share split of 1-for-6 and a rights issue of 1-for-7 at Rs 62.50 on the new capital. Sri Lanka Telecom became the first quoted company to cross the Rs.50 billion mark in revenue. It also announced a first and final dividend of 60 cents per share.
Laugfs Voting and Non Voting, Richard Peiris and Piramal Glass which established a peak price of Rs 11 on Friday were in regular demand. An unusually high quantity of 35,400 shares in the high-priced Colombo Pharmacy was transacted on Thursday, closing at Rs 3100. It escalated the next day to Rs 4100 easing off on Friday.
Guardian Capital commenced trading ex rights on February 21 at Rs 383.70 and continued to rise in slabs of Rs 575.50, Rs 863.20, Rs 1294.30 and finally ended the week at Rs 1942.10!
Substantial gains were noticed in Nuwara Eliya Hotels, DIMO and J.L Morison Voting and Non Voting shares.
Some relief was offered to the industry with the easing of the price band period to 10 days and the lifting of the 50% upfront deposit requirement.
Carson Cumberbatch and Bukit Darah have made a voluntary offer to the minority share holders of Malaysian companies: Indo Malay,Selinsing, Good Hope and Shalimar, to acquire the balance which is actually a small segment. Carson’s and Bukit have a majority control of these companies. The price band on Lanka Aluminium and Alufab was lifted on February 25.
Changes in directors
Sujeewa Rajapakse, Treasurer of Sri Lanka Cricket and Vice President – Institute of Chartered Accountants of Sri Lanka, was appointed to the board of NDB Bank while Joachim Lasantha Caspersz was poointed to the board of Finlays, Colombo.
E-Chanelling: 1 share subdivided into 7
HNB Assurance: 1 share into 6
Rights Issue -- HNB Assurance 1 for 7 shares on the new capital at Rs 62.50
- Piramal Glass: 56.68 million shares
- Richard Peiris: 9.89 million shares
The All Share Index fared favourably gaining 39.13 points or .05% to close at 7711.62 while the Milanka Price Index eased at 7169.35, down 72..80 points or 0.01%.
(Elton, our regular columnist on the stockmarket, could be reached at email@example.com)