Financial Times

Dialog IPO oversubscribed, CSE hits new high
Dialog Telekom’s initial public offering (IPO) last week exceeded expectations and was oversubscribed close to eight times locally and four and a half times in the foreign markets.

The week also saw both indices of the Colombo Stock Exchange (CSE) hitting new highs, making it Asia’s best performing bourse. Vajira Kulatilaka, CEO, NDB Investment Bank, handling the issue for Dialog, said that US$ 400 million was raised by the foreign applications. “This is nearly Rs.40 billion and the foreign demand is unprecedented, which will augur well for the country’s future in terms of investment,” he said.

Stock analysts said that Sri Lankan-born foreign fund manager, Raj Rajaratnam and Citibank, USA had applied for the entire issue of 712.3 million one rupee shares or 9.6 percent stake in the company, at a bidding price range of Rs.8 to 12 per share.

They said that Kuwaiti national, Thalib Al Nakib, who is an active player in the Colombo bourse had applied for one billion rupees and tycoon Harry Jayewardena's Sri Lanka Insurance Corporation had also applied for more than a billion rupees worth of shares. HSBC recorded issuing the highest number of applications for the largest amounts.

Dialog Telekom provides the widest cellular coverage in the country, and serves over 1.5 million customers from across all nine provinces of the island and accounts for 60 percent of the country’s mobile sector and 40 percent of total telecommunication subscribers. During the last ten years much of the investment in the country has been from the telecom sector.

The CSE’s All Share Price Index (ASPI) crossed the 1,950 mark on Friday for the first time. The ASPI recorded growth of 30.1 points during the day to close at 1,952.3 points, its highest ever point. The Milanka Price Index (MPI), which was introduced in 1999, gained 45.1 points to close the day at 2,767.5 points, the highest point recorded since its inception.

A total turnover of Rs 1.01 billion was recorded during the day, the second highest daily turnover recorded at the CSE for the year 2005. The ASPI of the CSE has recorded a growth of 445.4 points (30 percent) for the year so far and has become the best performing stock market in Asia and one of the best in the world. The ASPI has recorded a growth of 384 percent from October 2001 to date.

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