Sri Lanka stocks slip further, investors get ready for Janashakthi offer

June 11, 2008 (LBO) – Sri Lanka stocks slipped further on dampened sentiment with investors selling shares to raise funds for a forthcoming public offer by Janashakthi Insurance. The All Share Price Index fell 0.58 percent (14.32 points) to end at 2,474.93 while the more liquid Milanka was down 0.35 percent (10.45 points) to end at 2,981.04.

Total turnover was 261.9 million rupees with 5.51 million shares traded.

Hayleys closed 1.50 rupees lower at 126.50. The share shot up by 16.00 rupees the previous day with investor Dhammika Perera buying a six percent stake, which he wants to raise to 10 percent.

Investors were selling shares to prepare for the Janashakthi public offering, adding more pressure to the downward trend in the market caused by worries over lower corporate earnings, brokers said.

Janashakthi is selling 16.5 million shares at 12 rupees each, with an option to sell a further 16.5 million shares in a bid to raise close to 400 million rupees.

The firm has 112 branches, and has also ventured in to the Maldives. Its 3,000 strong sales force had brought in 5.2 billion rupees in revenues last year.

In the year to December 2007, the group posted 525 million rupees in net profits. The Janashakthi offer might help revive the market, analysts say.

In the broader market, activity was concentrated on Distilleries, which was up 3.25 at 103.25 rupees with 623,200 shares changing hands, adding 65.38 million rupees to the turnover.

Market indices were affected by index heavy Carsons losing 99.00 at 4,400.00.

In telecoms, Dialog closed down 25 cents at 13.00 while Sri Lanka Telecom closed flat at 46.75.

Kelani Tyres closed up 2.75 rupees at 70.00 with 345,100 shares traded.

Commercial Bank was down 1.50 rupees at 127.25.