Financial Times

Dialog to list on Colombo bourse
By Duruthu Edirimuni
On the back of Lanka Indian Oil Company's successful Initial Public Offering (IPO), a listing by MTN Networks, the holding company of mobile phone operator Dialog GSM expected this year, is awaited with bated breath by investors.

MTN sources said they have not finalised any plans, but there is an IPO on the cards towards the end of this year. They said the company is in talks with NDB Investment Bank, formerly CitiNational, a joint venture between NDB Bank and CitiBank. Officials at NDB Investment Bank said there are plans for an IPO, but nothing is finalised as yet.

The issue is expected to increase the market capitalisation. "There is a tremendous awareness about Dialog and it appears to be a well performing company," a stockbroker said.

"There is a large value in the company due to its size and the expansion it has gone through," an analyst said, adding if Dialog is listed, it will increase the price index of the Colombo bourse. "Investors are starved for quality issues and an IPO of this magnitude will address the liquidity issue of the market," Dimuthu Abeyesekera, CEO, Asha Phillip Securities Ltd., said. He said a Dialog listing will also boost the telecom sector.

Murtaza Jafferjee, Managing Director, J B Stockbrokers said the MTN listing will be a very welcome issue in the market because of its large size. "We need such large sized stocks to increase the market capitalisation," he said.

He added that a larger market capitalisation will entice foreign institutional investors. "Since MTN Networks deals in only one line of business - telecommunication industry - it will be a 'pure play' stock which attracts the foreign investors."

"The Dialog issue will be priced below its true potential to encourage investors," a stockbroker said. He said like the LIOC issue, it will be priced so that the investors will reap an initial good return. The telecommunication industry is the fastest growing sector in the economy, growing at 20 percent annually.

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