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Sri Lanka stocks end up on retail activity in energy counter

June 23, 2008 (LBO) - Sri Lanka stocks Monday edged up again on the back of Friday's gains propelled by heavy trading in Vallibel Power Erathna, which announced a takeover deal, and trading in Dialog Telekom and Hayleys. Brokers said retail activity might pick up this week as investors may be more liquid with Sri Lanka Telecom shareholders who accepted the mandatory offer receiving their money.

The All Share Price Index gained 0.79 percent (19.55 points) to end at 2,479.53 while the more liquid Milanka closed up 1.22 percent (36.09 points) at 2,986.50. Turnover was 236 million rupees.

Speculative trading on Vallibel Power Erathna pushed the share up 60 cents to close at 4.40 on deals amounting to 85.27 million rupees.

"There was a bit of profit taking coming in on Vallibel," Naren Godamunne of DFCC Stockbrokers said.

The company said in a stock filing that it struck a deal with a prospective foreign investor for a takeover at five rupees per share.

Vallibel Power Erathna is one of the listed firms in the Vallibel group, owned by businessman Dhammika Perera.

The group's power division has a number of mini-hydro plants which have long term contracts with state-run Ceylon Electricity Board to sell power.

Retail activity on Dialog Telekom also pushed the share up by 50 cents to close at 13.75.

Hayleys closed up 5.50 rupees at 131.75 following deals on 122,400 shares that amounted to 15.89 million rupees.

A unit of the conglomerate, Hayleys MGT Knitting Mills, was up 25 cents at 55.
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25 following institutional buying, brokers said.

Meanwhile, the proceeds from the Sri Lanka Telecom mandatory offer will reach investors this week and they will have money to play around with in the market which will boost retail trading, brokers said.

Earlier in June, Malaysia's UT group made the mandatory offer after buying out a 35.19 percent stake in SLT from Japan's NTT Communications.

SLT closed flat at 46.00 rupees while conglomerate John Keells Holdings closed up one rupee at 113.00, Monday.

But the market, which moved up mainly on retail trade, is not expected to see a sustained rise unless there are positive developments either on the economic or political front that could revive corporate earnings and economic activity, brokers said.

Meanwhile, Merchant Bank of Sri Lanka, issue managers of the Janashakthi Insurance IPO, said it had received applications for almost 891 million rupees from 6,931 prospective investors.
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The number of shares applied for was 74.2 million.

Janashakthi is selling only 400 million rupees worth shares, and the firm is to announce the basis of allotment soon.

Updated

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