SLT share perk up on Dialog’s IPO pricing

Sri Lanka Telecom shares rose Friday, on investor perceptions that the stock is undervalued compared to the upcoming Dialog Telecom issue, traders said. Sri Lanka Telecom shares rose Friday, on investor perceptions that the stock is undervalued compared to the upcoming Dialog Telecom issue, traders said. More than 2 million SLT shares changed hands Friday with the stock climbing by Rs 1.25 to close at Rs 20.50, after briefly touching 20.75.

Sri Lanka Telecom posted quarterly earnings of Rs 909 mn, and analysts are forecasting that the company would have Rs. 3.8 bn in profits this year. SLT’s issued capital is Rs. 18 bn divided into ten rupee shares.

“If the company posts earnings of about two rupees ten cents this year, the stock is trading at less than 10 times forward p/e multiple even after today’s price rise,” says Hasitha Premaratne, Head of Research at HNB Stockbrokers.

Though investors have a choice of Rs. 8 to 12 to apply for Dialog Telekom shares, most are expected to play safe and bid at the top rate.

Dialog is expected to post around Rs. 7 bn profits in the current financial year on an issued capital of Rs. 7.4 bn (after the