Hela Clothing to go for an IPO, Nestle scoffs at delisting rumours

By Hiran H.Senewiratne 

Sri Lankan  Apparel maker “Hela Clothing” is planning for an Initial Public Offering (IPO) at the Colombo Stock Exchange (CSE) within this year  to raise capital for entry into North Africa and for expansion of its East African operations.

An entry into Egypt’s $1 billion apparel market will help boost the company’s value by about 11 percent  to $250 million by the end of the financial year in March, stock brokers said.

Hela will set up shop in the North African nation in the first quarter of 2022 and work with existing manufacturers, leveraging the country’s fabric mills, lace suppliers and mature supply chain to reduce lead times.

Amid those developments high-value stocks witnessed decline due to sluggish economic conditions and fear of spreading the Covid 19 Delta variant, which resulted in many countries to impose lockdowns, stock markets analysts said. If the variant spreads in Sri Lanka, another lockdown would be an unbearable shock to the economy, stockbrokers said.

Therefore 140 companies’ stocks were down and only 41 companies’ stocks moved up. However LOLC Development Finance was the major contributor for the All Share Price index, which contributed 68.5 points despite being down. Both indices moved down. All Share Price Index down by 17.86 points and S and P SL20 down by 31.34 points down. 

Turnover stood at Rs 2.3 billion sans a single crossing. In the retail market, the top five companies that mainly contributed to the turnover were LOLC Rs 1.06 billion (2.59 million shares traded), Hayleys Rs 108.9 million (1.44 million shares traded), Browns Investments Rs 96.2 million (16 million shares traded), Expolanka Rs 73.7 million (1.48 million shares traded), and Royal Ceramic Rs 65.2 million (1.83 million shares traded).

The market witnessed a negative investor sentiment  but LOLC Development Finance was very active and its share price appreciated by 35 percent or Rs 123.75. Its share price startered trading at Rs 495 at the end of the day its price shot upto Rs 618.75.

Nestle share price appreciated on Monday with the purchasing of its shares by the parent company (Nestle in Switzerland) on the previous day. However, Nestle share price declined yesterday as certain rumours were scoffed at by the Nestle parent company and indicated that they had no idea of delisting from the CSE, market analysts said.  Its share price witnessed a steep drop by Rs 83.50 or six percent to Rs 1361.50 from Rs 1444.50.

During the day 60 million share volumes changed hands in 23083 transactions.