Sri Lanka investors chase Seylan Merchant Leasing

March 11, 2009 (LBO) – Sri Lankan shares ended slightly firmer Wednesday on low volumes with the most actively traded stock being Seylan Merchant Leasing which is to be bought by the island’s largest leasing firm, brokers said.

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The All Share Price Index edged up 0.44 percent (7.21 points) to end at 1,637.91 while the more liquid Milanka was up 0.98 percent (16.37 points) to close at 1,692.58.

Turnover was 38 million rupees.

The share price of Seylan Merchant Leasing, which is part of the troubled Ceylinco group, rose 20 percent or three rupees to close at 17.75 rupees with 162,100 shares traded.

Sri Lanka’s largest leasing company People’s Leasing Company, a unit of state-run People’s Bank, is in talks to buy Seylan Merchant Leasing, majority owned by Seylan Merchant Bank, which in turn is controlled by Seylan Bank, part of the Ceylinco group.

The Ceylinco group is selling off subsidiary firms to raise cash to repay depositors of an unlisted group firm, Golden Key Credit Card Company, which collapsed.

Ceylinco group chairman Lalith Kotelawala has been remanded on fraud allegations at Golden Key.

Seylan Bank was placed under guardianship of state-run Bank of Ceylon after heavier than usual withdrawals by depositors concerned about the group’s financial health.

There was also active trading Wednesday, albeit in small volumes, in The Finance Company, also part of the Ceylinco group. The Finance fell 11 percent or three rupees to end at 24.75 rupees.

Most other Ceylinco group firm shares that were traded fell in price.