Sri Lanka Seylan Merchant Leasing draws investors in thin trade

March 16, 2009 (LBO) – Sri Lankan shares ended slightly weaker Monday, dragged down by heavyweights, in thin trade with investors chasing 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 down 0.80 percent (13.05 points) to end at 1,619.82 while the more liquid Milanka fell 1.06 percent (18.03 points) to close at 1,679.90.

Turnover was 55 million rupees.

Heavyweights John Keells Holdsings and Dialog Telekom both ended weaker.

C W Mackie was the most actively traded stock, rising 15 percent or two rupees to close at 15 rupees.

Seylan Merchant Leasing, whose share price has risen sharply in recent weeks, was the second most actively traded stock, ending up 25 cents to close at 17.75 rupees

Seylan Merchant Leasing is part of the troubled Ceylinco group which is selling off subsidiaries to raise funds to repay depositors of a collapsed unlisted subsidiary, Golden Key.

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.

Seylan Merchant Leasing is majority owned by Seylan Merchant Bank, which in turn is controlled by Seylan Bank, part of the Ceylinco group.

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

Seylan Bank weakened by 50 cents to close at 31.50 while other Ceylinco group firms were either weaker or flat.

Seylan Bank has been placed under a state bank and a new board appointed by the central bank which is also reported to be ready to call for bids from investors to recapitlaise the bank.