Business Times

Investors dilemma: No funds for IPOs

Stockmarket Review
By Elton R Ebert

From where do they find funds to invest in the two mega IPOs. Are they to sell some of the lucrative blue chips to collect these funds? These are the problems and issues facing some investors with the additional problem of the disparity between the priate placement and IPO pricing. A minor consolation is that the refund on Expolanka is now underway. Its shares will be lodged into the CDS accounts before 9th June 2011

The IPO of the highly diversified Softlogic Holdings Ltd offering 139 million shares at Rs 29, is now on, the opening date being 9th June 2011. The value of which is in excess of Rs 4 billion. The company was faced with the issue of the price of its IPO and the private placement,but they were able to overcome this issue with some convincing arguments.

Vallibel One which is well diversified and is in renewable energy projects is offering 21,311,870 voting shares at Rs.25 which is at the same price at which there was a private placement earlier. Meanwhile Browns Investments Ltd will be offering on the Diri Savi Board 50 million ordinary voting shares at Rs 5. The issue opens on June 21.

It is characteristic of the Colombo bourse, that when there are IPOs on offer the Colombo bourse goes on the retreat, and it should be the same now. Those not investing in the new issues will be able to grab selected shares at good prices.

During the week Colombo Land which was extensively traded of late became an associate of the Citrus Leisure group through Kalpitiya Beach Resorts Ltd, with its 20.18% stake. Consequently there were many changes in the directorate at Colombo Land which continued its upside for most of the week, reaching Rs 54.90 at mid session on Friday. Other Land & Property stocks also picked up – eg. Overseas Realty and Colombo Fort Land & Building.

A sudden storm hit Singer Sri Lanka earlier in the week on a story that a billionaire entrepreneur was taking over the company, hitting a high mark of Rs 169 on Tuesday 31st May. However in reality Singer Industries Ceylon Ltd stated that it had disposed its entire stake to Singer Sri Lanka, the major part being sold on 30th May 2011. Singer Sri Lanka was trapped into the price band on 1st June 2011.

In the Banking, Finance & Insurance sector, Ceylinco Insurance made a massive gain when it was transacted at Rs. 950 per share. Among the other price upheavals Colombo Pharmacy rose to Rs 2950, and Kalamazoo to Rs 2400, while E.B.Creasy moved in the opposite direction to end at Rs 2412.
Directors: Arpico Finance Co Plc - Lyle Dennis Peiris was appointed and Independent Non Executive Director from 1st June 2011; Colombo Land and Development Ltd - R.R. Tudawe resigned as chairman on 1st June 2011 and Dr Nalaka Godahewa was appointed Chairman on the same day.

An improved turnover for the week of Rs 18.5 billion was recorded when compared with Rs 15.5 billion last week. However both indices were lower than last week, the All Share Price dipping 53.56 or .07% to 7406.02 while the Milanka was 15.14 or .07% lower at 6857.40.

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