Business Times

Dhammika’s foray into Lankan Aluminium and Hayleys dominates proceedings

Stockmarket review
By Elton P. Ebert

It was another fiery week at the Colombo bourse with PC House, Environmental Services Ltd and enterprising entrepreneur Dhammika Perera, who is along with interested parties, is seen aiming to take control of the highly diversified Hayleys group dominating the market and trading news during the January 24-28th week.

The retail segment held sway moving up the indices. One major aspect earlier in the week was the capture of the controlling stake in Lanka Aluminium by Dhammika Perera, who now holds 37% of the company. He has made a mandatory offer for the remaining shares at Rs 41.50. A few days ago it was revealed that another company of his, Vallibel One had a very successful private placement.

Later in the week -- Perera, who is also a government official now as Transport Ministry Secretary --, and connected parties increased their stake in highly diversified Hayleys in excess of 30%, which necessiates a mandatory offer according to the Takeover and Mergers Code. Here the value of the bid is a staggering Rs 20 million! Hayleys shares moved up to Rs 400, but eased off subsequently on January 28. This is the second takeover by Perera this week. Amana Takaful which had been riding a popularity wave recently announced a Rights Issue of 1-for-1one at Rs.1/50 per share with some 72.5 million shares being transacted the previous week. Bairaha Farms, Three Acre Farms and Grain Elevators continued its winning streak.

Positive data from the plantations sector shows premium prices for rubber and tea and expected earnings for first quarter 2011 created a rally in the plantation stocks on Wednesday. Stocks with an exposure to rubber like.

Horana Plantations and Elpitiya Plantations rose sharply. Almost five million shares in each of these companies was traded at enhanced prices of course! Both stocks were captured by the price band. Price Bands were also imposed on C.W. Mackie and MTD Walkers (Kapila Heavy). The latter which had a 19-for-1 rights issue recently is on an expansion programme with foreign collaboration for some of its new ventures.

PC House which has enjoyed immense market support, saw the appointment of Failan Saleem, a leading consultant and marketeer to head the Mobile Handset division. On Thursday, 16.9 million shares was transacted, with its peak level being Rs. 32.20 during the week.

Deutsche Bank confirmed a receipt of Rs.4.5 billion on behalf of Environmental Services Ltd being proceeds of the sale of 24 million shares of Eastern Platinum Ltd. However this did not move the price of the shares; investors may have factored this in their calculation already.

LOLC inaugurated a foreign currency exchange facility in Matara, and they are arranging for this facility to be made available in all major towns. Trading ended for the week with some prices easing off due to a bout of profit-taking. Plantations which took off Wednesday came in for a gradual trimming in prices.
The All Share Index (ASI) closed the week at 7,192.49 while the Milanka closed at 7,165.32. Turnover for the week was Rs 19 billion

(The writer is a veteran commentator on the stockmarket. He will be regularly writing a stockmarket weekly for the Business Times).

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