NDB Bank to raise Rs. 8 billion via rights issue

By Hiran H.Senewiratne 

NDB Bank announced plans to raise Rs. 8 billion via a rights issue to enhance its capital base and finance business growth, stock market analysts said.

The bank has resolved to issue 106.78 million shares on the basis of 28 new shares for 61 held at Rs. 75 each, CSE sources said

NDB share price closed unchanged yesterday at Rs. 83.40. Its net asset value per share as at June 30 was Rs. 184.25, up from Rs. 178 as at December 31, 2019. The current stated capital is Rs. 8.79 billion represented by 232.63 million shares. 

NDB Bank has 9,922 public shareholders. Among the biggest shareholders of NDB Bank are EPF (10percent ), BOC (8 percent ), Sri Lanka Insurance (11percent ), Dr. Sena Yaddehige (4 percent ), Softlogic Life Insurance (4 percent ), and ETF (4 percent ). The proceeds of the NDB rights issue are to be utilised to further strengthen the equity base of the bank and thereby improve capital adequacy ratios in line with BASEL III guidelines of the Central Bank and to part finance the growth in the loan portfolio of the bank.

However, CSE activities were positive yesterday morning but subsequently became negative with the government announcement on the imposition of a quarantine curfew for the Gampaha district coupled with the disclosure of certain negative provisions in the 20th amendment to the Constitution.

Amid those developments both indices turned negative. The All Share Price Index went down by 249.56 points down and S and P SL20 declined by 95.46 points. The turnover stood at Rs. 3.25 billion with three crossings. Those crossings were reported in Cargills where  778,000 shares crossed to the tune of Rs. 147.8 million; a share price trading at Rs. 190, Keells Hotel 3.1 million shares crossed for Rs. 24.7 million, its shares trading at Rs. 8 and Melstacorp 600,000 shares crossed for Rs. 21 million at a per share value of Rs. 35.

In the retail market top five companies that contributed to the turnover were, Expolanka Rs. 488 million (27.4 million shares traded), JKH Rs. 267.8 million (two million shares traded), Tokyo Cement (Non Voting) Rs. 183 million (3.5 million shares traded), Tokyo Cement (Voting) Rs. 153.2 million (2.5 million shares traded) and HNB (Voting) Rs. 93.4 million (796.000 shares traded). During the day 196.7 million share volumes changed hands in 36983 transactions. 

Corporate earnings of listed companies plunged by 52 percent  year-on-year (YOY) to Rs. 33.5 billion in 2020 March quarter, First Capital Research revealed yesterday. The analysis was based on reported earnings of 266 listed companies. 

It said the plunge was primarily owing to sluggish performance in Diversified Financials (-87 percent  YOY), Capital Goods (-63 percent YOY), Food, Beverage and Tobacco (-72 percent  YOY), Telecommunication (-52 percent  YOY) and Consumer Services (-101 percent  YOY). 

However, an upbeat quarterly performance was witnessed in the following sectors, Banks (+32 percent YOY) followed by Food, Staples and Retailing (+96 percent  YOY) and Materials (+8 percent  YOY).