Two major acquisitions at CSE

By Hiran H. Senewiratne 

Two major acquisitions took place at the CSE this week. One was Vidul Lanka, which  acquired  50 percent of shares in Solar Universe Pvt Limited.  The company generates 10 megawatts for the national grid and operates a ground mounted solar power plant, stock market analysts said.

Accordingly, total investment for its acquisition and development of the project would cost around Rs 1.4 billion. Meanwhile,  Aitken Spence PLC acquired energy company Waltrim Energy Limited  for a financial consideration of Rs 900 million. The company generates 6.6 megawatts for the national grid, operating three plants in Nuwara Eliya. Waltrim was a subsidiary of Sunshine Holdings which owned a 60 percent stake while Mouldex owned the balance shares.

Amid those developments, CSE was bullish throughout the day and financial sector counters witnessed gains. Both indices moved upwards. All Share Price Index went up by 117.8 points and S and P SL20 rose by 48.10 points. Turnover stood at Rs 3.92 billion with four crossings.

Those crossings were reported in HNB, which crossed 3.9 million shares to the tune of Rs 516.7 million, its shares traded at Rs 132, JKH 200,000 shares crossed for Rs 29.8 million and its shares traded at Rs 148.75, Sampath Bank 500,000 shares crossed for Rs 27 million, its shares traded at Rs 54 and Lanka Walltiles 500,000 shares crossed for Rs 24.25 million, its shares traded at Rs 48.50. 

In the retail market, top companies that mainly contributed to the turnover were; Browns Investments Rs 500.7 million (87.2 million shares traded), Expolanka Rs. 361.2 million (7.4 million shares traded), Dipped Products Rs 285.5 million (5.1 million shares traded), Sampath Bank Rs 233.8 million (4.3 million shares traded), LOLC  Rs 216 million (685,000 shares traded), and Royal Ceramic Rs 165.7 million (517,000 shares traded). During the day 150.6 million share volumes changed hands in 21700 transactions.

LOLC  and Browns Investments were the main contributors to the All Share Price Index and their share prices also appreciated during the day. LOLC contributed 22 points. Its share price moved up by seven percent or Rs 20.25. Its shares started trading at Rs 304.50 and at the end of the day they moved up to Rs 324.75.  Browns Investments contributed 13 points. Its shares moved up by seven percent or 40 cent. Its shares traded at Rs 5.60 and at the end of the day they moved to Rs 6. 

The Sri Lankan rupee has come once again under pressure. According to the daily exchange report of the Central Bank of Sri Lanka (CBSL), the current buying rate of the US dollar on April 8 stood at Rs.199.21 and selling rate of the US dollar stood at Rs.203.50.This is the highest buying and selling rate recorded for the US dollar in history.

The decline of the rupee vis-à-vis the US dollar is likely to have a mixed impact on listed companies. Rupee will have a negative impact for companies, such as, Dialog Axiata, Hemas Holdings, Lanka Lubricants while the slightly negative counters are, Sunshine Holdings, Tokyo Cement (Lanka), Acccess Engineering, Cargills (Ceylon) and Ceylon Cold Stores.

Those which will benefit from a depreciation include, JKH, banks, TeeJay, Hayleys Fabric, Dipped Products and hotels; though at present tourist arrivals are very low.