Melstacorp state capital reduction positively impacts shares of three major companies

By Hiran H.Senewiratne

Melstacorp PLC, a highly diversified tenth largest CSE listed conglomerate that is headed by Sri Lankan business magnate Harry Jayawardena has announced to reduce its state capital from Rs. 89.1 billion to Rs. 70 billion. The reduced Rs. 19.1 billion will be transferred to the capital reserve of the company, which will act as a buffer to face market volatility, stock market analysts said.

The company being a holding company with listed subsidiaries and other companies will not have any liquidity issue at any cost for the payment of dividend for shareholders. Further, this will be held as a buffer for solvency calculations and hence that fund will not be used for any other distribution, stock market analysts said.

Melstacorp PLC is engaged in managing a portfolio of holdings consisting of a range of business operations and provides function-based services to its subsidiaries and associates. The subsidiaries are involved in a wide range of industries, such as liquor manufacture and distribution, leasing, insurance, logistics, ICT, telecommunications, energy, tea and rubber plantations, hospitality, property development, brand management, and advertising. The company was founded in 1996 and is based in Colombo.

Meanwhile, the activities at the CSE were positive and both indices moved upwards. All Share Price Index went up by 47.07 points and S and P SL20 rose by 24.92. Turnover stood at Rs 2.49 billion with three crossings. Those crossings were reported in Printcare where 4.15 million shares crossed for Rs. 137 million, its shares traded at Rs. 33, Asiri Hospital Holdings 1.47 million shares crossed for Rs. 41.1 million, its shares traded at Rs. 28 and Asia Siyake Commodities 9.5 million shares crossed for Rs. 32.3 million, its shares fetching Rs. 340.

In the retail market, five companies that mainly contributed to the turnover were, Expolanka Rs. 294.5 million (4.41 million shares traded), Ambeon Holdings Rs. 115.4 million (3.9 million shares traded), Dialog Rs. 112.9 million (1.27 million traded), Bogala Graphite Rs. 105.7 million (1.27 million shares traded) and LOLC Rs. 94.2 million (201,000 shares traded).

One finds that due to Melstacorp state capital reduction, share prices in three major groups of companies moved up. Melstacorp shares moved up by Rs. 3.50 or four percent. Its shares moved up to Rs. 52.80 from Rs. 51. Distilleries shares appreciated by three percent of 80 cents. Its share price moved up to Rs. 19.80 from Rs. 19.20. Aitken Spence shares also appreciated. Its shares moved up by Rs. 5 or 8 percent, which appreciated to Rs. 69.80 from Rs. 64.80. During the day 142.3 million share volumes changed hands in 27153 transactions.