Sri Lanka share trading boosted by Carson oil palm deals

March 26, 2009 (LBO) – Sri Lankan shares ended almost flat Thursday but turnover was pushed up to 915 million rupees by large transactions in three oil palm companies of the Carson Cumberbatch group, brokers said.

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The All Share Price Index edged down 0.02 percent (0.27 points) to end at 1,636.96 while the more liquid Milanka went up 0.06 percent (1.06 points) to close at 1,734.46.

Srimal Liyanage of Lanka Securities said the day’s turnover was propped up by the large transactions in Carson group firms as well as in Lighthouse Hotel.

A total of 1.8 million shares of Lighthouse changed hands at 50 rupees a share, up five rupees.

“Market sentiment is still negative mainly because interest rates are still high and because of the economic downturn,” Liyanage said.

“After removing these special transactions, the day’s normal retail market activity was very low.”

The Carson transactions were part of a restructuring of its palm oil firms under
Goodhope Asia Holdings, a fully owned subsidiary in Singapore of the Carson Cumberbatch group with the seller being Rubber Investment Trust Limited, another group firm.

These were over 1.66 million shares of The Indo Malay at 124.25 rupees a share, 1.97 million shares of Selinsing at 120 rupees and 2.1 million shares of The Good Hope at 135 rupees a share.

The company said in a stock exchange filing that 2,129,349 shares of The Good Hope, which amounts to a 30.99 percent stake, were bought by Goodhope Asia Holdings raising its stake to 87.26 percent.

Carson also said 1,666,722 shares The Indo Malay, amounting to a 23.82 percent stake, were bought by Goodhope Asia Holdings, raising its stake to 76.78 percent.

And 1,976,400 shares of Selinsing (a 28.48 percent stake) were bought by Goodhope Asia Holdings increasing its stake to 86.57 percent.

Carson had earlier said it was bringing its Malaysian palm oil businesses under its Singapore subsidiary, Goodhope Asia Holdings as part of a strategy to enable it to establish a stronger presence in the palm oil industry in its home base in south east Asia.

Liyanage of Lanka Securities said the Carson transfer may be because of the new company law under which subsidiary firms cannot fund the parent company.