Capital Alliance Holdings picks up commodity brokers De Silva Abeywardena & Peiris (Pvt) Ltd for Rs. 10 mn

Rising investment bank Capital Alliance Holdings extended its portfolio by picking up commodity brokers De Silva Abeywardena & Peiris (Pvt) Ltd on Monday in a deal worth Rs. 10 mn.

The forty two year old De Silva Abeywardena & Peiris, is currently one of the smallest out of the nine commodity brokers, with interest in tea broking and advisory services, tea warehousing and financing estate owners.

The closely family held commodity broker will retain its footing in a somewhat smaller scale, with Rukman Abeywardena as Chairman.

Abeywardena says that he and his cousin are getting on in years and were scouting for young blood ‘with some financial sense’ to take on the reigns.

“We found that synergy with Capital Alliance. They are young, willing to take the risk. They also have the financial expertise to drive the business when it comes to financing tea estates, supplier credit and so on,” Abeywardena told LBO.

For Capital Alliance Holdings, the deal is another trophy to its small but growing portfolio.

The four-year old Group, began as a subsidiary of Asia Capital Ltd and later spun off with a coveted primary dealer licence under its wing. A primary dealer is a distributor of treasury bills/bonds and participates in the primary and secondary markets of government securities.

Since then, Capital Alliance has added fund management and money broking. The Group is also a trading member of the Colombo Stock Exchange.

“A stockbroking licence is the next stop for us,” says Ajith Fernando, Capital Alliance’s CEO. “With that in the bag, we can offer a full 360 degree service to our clients.”

Fernando says in developed markets most investment banks have their fingers in commodity trading as well.

“The opportunities are endless, you can do commodity futures and options. Sri Lanka does not have these instruments now, but when they come out, we would like to be in the forefront as market makers,” he said.

He doesn’t expect to see any drastic changes in the way De Silva Abeywardena is run. “A few tweaks here and there. We will take the traditional business and give its some different thinking where needed.”

De Silva Abeywardena were also involved in stockbroking, but sold to the LOLC Group for Rs. 42 mn in April 2002. The firm now goes as LOLC Securities.

(US$ 1 = Rs. 99.50)

Rising investment bank Capital Alliance Holdings extended its portfolio by picking up commodity brokers De Silva Abeywardena & Peiris (Pvt) Ltd on Monday in a deal worth Rs. 10 mn.

-LBO Newsdesk: LBOEmail@vanguardlanka.com