Janashakthi acquisition of 31 per cent stake in Dunamis Capital boosts CSE

By Hiran H.Senewiratne

The Colombo Stock Exchange (CSE) touched Rs. 1.7 billion in turnover yesterday with the acquisition of 31.14 percent of the issued capital of Dunamis Capital PLC by Janashakthi PLC (JPLC), stock market sources said.

Dunamis Capital is the holding company of First Capital PLC and Kelsey Developments PLC, with a capital of Rs. 1.4 billion (Rs. 36.60 per share).

The transaction will result in the consolidation of all of the listed holdings of the Schaffter family under one entity, making Janashakthi PLC the parent company of all the family-controlled businesses.

Consequent to the acquisition, Janashakthi PLC will make a mandatory offer to all other shareholders of Dunamis Capital. With the undertaking from Dinesh Schaffter and Manjula Mathews to accept the mandatory offer, upon conclusion of the mandatory offer, JPLC is expected to have a shareholding in excess of 90% in Dunamis Capital. The transaction will result in Dunamis Capital along with First Capital and Kelsey Developments becoming subsidiaries of Janashakthi PLC.

Amid those dvelopments, both indices indicated mixed reactions, ie, the All Share Price Index moved up by 1.68 points and S and P SL20 went down by 3.20 points with three crossings. Those crossings were: Dunamis Capital crossed 1.4 billion to the tune of Rs. 38.3 million, per share value Rs. 36.60, CT Holdings 275,000 shares crossed for Rs. 50 million, per share value Rs. 182 and Cargills 192,200 shares crossed for Rs. 39.4 million, per share value Rs. 205.

In the retail market, companies that mainly contributed to the day's turnover over were: JKH Rs. 48.5 million (389,000 shares traded), Dunamis Capital Rs. 42.8 million (1.2 million shares traded) and Union Assurance Rs. 15 million (43700 shares traded). During the day 51 million share volumes changed hands in 4030 transactions.

The Dunamis crossing and retail market transactions contributed more than 80 percent to the day's turnover. If not for those transactions the market would have ended  on a negative note, stock market analysts said.

Nevertheless, analysts said investors were worried after Japanese bank Nomura Holdings ranked Sri Lanka among seven emerging market economies that were at risk of an exchange rate crisis.

However, the Central Bank in a statement said that Nomura Holdings has made a serious computational error with regard to Sri Lanka’s external vulnerability and its short-term external debt is nowhere near the $160 billion figure that Nomura analysts quoted.

Nomura later corrected the figure to US $7.5 billion, but said its analysts have used the same figure to calculate the country’s Damocles score for the analysis and thus it is unchanged.

Meanwhile, JKSB reports -

ASPI: 6,060.68 (+1.68 pts; +0.03%); Val T/O: Rs. 1.69bn (US$10.4mn); Vol T/O: 51.0mn; Trades: 4,030

Advance/decline ratio: 95/73; Top gainer: SEMB.X (+50.00%) ; Top loser: OFEQ.N (-18.54%)


• The ASPI ended marginally higher amid healthy turnover levels due to a Rs.1.4bn CSEC crossing resulting from JANA acquiring 31% of CSEC. CTHR and JKH also led market activity with trading in CSEC amounting to 85% of total turnover.

• Diversified Holdings was the most actively traded sector (+0.32%)

• Information Technology was the best performing sector (+12.28%), supported by gains on ECL.N (+13.04%)

• Trading was the worst performing sector (-0.62%), dragged down by declines on BRWN.N (-4.42%)

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