Subdivision of Lanka Milk Foods shares peps-up stock market

By Hiran H.Senewiratne

The stock market kicked off on a positive note early yesterday due to the majority shareholder in Lanka Milk Foods (CWE), the Stassen Group of companies, announcing a sub-division of shares, one share into ten equal shares, but later the market turned negative, stock market analysts said.

“The Board of Directors of Lanka Milk Foods (CWE) resolved through a circular resolution to recommend to its shareholders to increase the number of ordinary shares in issue of the company by way of subdivision. With that announcement the share price moved up to Rs 212.50 from Rs 185, which was a 16 percent or Rs 29.50 increase, market analysts said.

Under the sub-division, every existing ordinary share will be subdivided into ten ordinary shares. Consequent to the subdivision, the number of issued ordinary shares will be increased from 39,998,000 ordinary shares to 399,980,000 ordinary shares.

There will be no change to the stated capital of the company subsequent to the aforesaid sub-division of shares, and it will remain at Rs 999,950,000. The shares, subdivided as aforesaid, will rank equally and pari passu in all respects with the existing shares of the company. The increase in the number of ordinary shares by way of a sub-division as referred to above, is subject to shareholder approval at an Extraordinary General Meeting and on approval of the CSE, analysts said.

Amid those developments both indices moved downwards. The All Share Price Index down by 51.78 points, while S and P SL20 swent down by 5.97 points. Turnover stood at Rs 787 million without any crossings. In the retail market, top seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 240 million (1.8 million shares traded), Lanka Milk Foods Rs 87 million (409,000 shares traded), Grain Elevators Rs 43.6 million (243,000 shares traded), Hayleys Rs 31 million (400,000 shares traded), Sampath Bank Rs 23.2 million (337,000 shares traded), Distilleries Rs 21 million (788,000 shares traded) and TJ Lanka Rs 18 million (516,000 shares traded). During the day 19.6 million share volumes changed hands in 8900 transactions.

It is said that high net worth and institutional investor participation was noted in Sampath Bank, CTC and Central Finance Company. Mixed interest was observed in Dialog Axiata, Nations Trust Bank and Hayleys, while retail interest was noted in Capital Alliance, First Capital Holdings and Browns Investments.

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings), while the sector index lost 0.98 percent. The shares of John Keells Holdings decreased by Rs. 2.25 to Rs. 192.50.

The Diversified Financials sector was the second highest contributor to the market turnover. Dialog Axiata, Sampath Bank and Nations Trust Bank were also included among the top turnover contributors.

Yesterday, the rupee opened at Rs 327.40/80 to the US dollar from Rs 327.70/328.00 previous, dealers said.

Bond yields were broadly stable. A bond maturing on 01.08.2026 was quoted at 14.60/80 percent from 14.75/80 percent. A bond maturing on 15.01.2027 was quoted at 14.70/75 percent from 14.60/75 percent. A bond maturing on 01.07.2028 was quoted at 14.65/85 percent from 14.60/80 percent.