Sanasa Development Bank goes for SPO

By Hiran H.Senewiratne 

Sanasa Development Bank will go for a Secondary Public Offering (SPO) soon. This is the first offering in the recent past and the bank will issue 88 million new shares to the public through this secondary offering, stock market analysts said.   

Under this SPO the price of a share will be determined three days prior to the Extra General Meeting,  based on the one month volume weighted average price, which would mostly be on par with current market prices, market analysts said.

It is said that the purpose of the SPO would be to strengthen the equity position of the company. At present 91.6 million shares are in issue in the CSE, CSE analysts said. 

Amid those developments, the CSE was overly positive yesterday selling pressure was noted on the banking sector, especially in Sampath Bank, Commercial Bank and HNB. This has affected the blue chip index, i.e., S and P SL20. 

However, manufacturing sector counters attracted some investors. Meanwhile trade counters increased over 18,000 levels after a month, which indicated a positive signal to the market, analysts said. 

The All Share Price Index went up by 24.55 points and S and P SL20 rose by 6.58 points. The turnover stood at Rs. 2.1 billion with a single crossing. The crossing was reported in TJ Lanka, which crossed  seven million share volumes to the tune of Rs. 241.9 million, its shares traded at Rs. 39.

In the retail market, five companies that mainly contributed to the turnover were; Dipped Products Rs. 198.6 million (four million shares traded), Hayleys Rs. 186.2 million (2.8 million shares traded), Haycarb Rs. 170.5 million (1.7 million shares traded), Expolanka Rs. 137.1 million (2.95 million shares traded) and JKH Rs. 115.8 million (772,000 shares traded). During the day 77.6 million share volumes changed hands in 18845 transactions.

Year to date ASPI is still up 6.19 percent  and S&PSL20 is up by 8.7 percent.  Market capitalisation on April 1,  stood at Rs. 3.14 trillion, down by Rs. 647 billion from the 2021 peak and lower in comparison to Rs. 795 billion dip as of March 19, 2021.

Analysts, however, continue to stress that the CSE remains attractive. The Price Earnings Ratio (PER) as of April 1 was 14.98 times as against 11.25 times end December 2020 and 14.41 times end-January.

Sri Lanka’s rupee quoted weaker at 200.50/201 to the one week US dollar on Monday, while gilt yields were flat on dull trade, dealers said. The markets were closed on Good Friday. The rupee last closed in the one-week forward market at 199.50/200 to the US dollar on Thursday.