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Three listed companies adopting share split strategy to boost liquidity & share price

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Each existing EB Creasy share to be split into 100

Three companies listed on the Colombo Stock Exchange have announced decisions to subdivide their existing issued shares with no change in their stated capital in what is considered a measure intended, in the view of brokers and analysts, to increase the market liquidity of their shares with prospects to increase their price post-subdivision.

Among those companies that has announced subdivision of shares is old-established EB Creasy and Co. PLC, a member of the Colombo Fort Land and Buildings group, where a subdivision of each existing share into 100 new shares is pending.

The other two companies where subdivisions are pending are CIC Holdings PLC where a subdivision of each existing share into four has been announced and Lanka Aluminium Industries PLC where each existing share would be split into five.

Although there have been share splits since the new Company law came into effect on 2007, brokers and analysts could not recall a share split as big as what is proposed by EB Creasy which concluded its last Annual General Meeting for the year ended Mar. 31, 2020, on Dec. 30. A dividend of Rs. 18 per share (pre-share split) was adopted.

“Given that the company’s issued capital (stated capital is what now applies) was small, the Creasy share which is seldom traded has commanded a very high price on the trading floor of the CSE,” a broker said.

It last traded a few days ago between Rs. 3,150 and Rs. 3,070 with 506 shares changing hands in 34 trades. Its par value per share was Rs. 10 when par values applied. That concept went out with the introduction of state capital under the new company law.

Brokers and analysts said that there is a push-up factor possible in share splits but this has not always worked out.

“Consider an example of a company whose share is trading at Rs. 50 when a split of two new shares for each existing share is announced. Theoretically each new share should then be worth Rs. 25 but it doesn’t always work out that way, depending on market conditions. Shareholders always hope for a favourable movement from such measures,” a broker said.

CIC Holdings which has two classes of shares, voting and non-voting, will divide each existing share into four. An Extraordinary General Meeting has been called for Jan. 5 to secure shareholder approval for the proposed measure. The subdivision will apply to both voting and non-voting shares.

The CIC voting share last traded on the CSE between Rs. 184.90 and Rs. 182 closing at Rs. 182.30 with 57,601 shares transacted in 53 trades. The company paid two interim dividends of one rupee each for the financial year ended Mar. 31, 2020.

At Lanka Aluminium, each existing share will be split into five. Its share last traded at a range of Rs. 112.70 to Rs. 113.30 closing at Rs. 112.70 with 71,059 shares transacted in 119 trades. The company paid a first and final dividend of one rupee for the last financial year.



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SLT-MOBITEL AkazaLMS enables corporate employee capability development

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As SLT-MOBITEL, the National ICT solutions service provider, continues to play a pivotal role in driving Sri Lanka’s digital transformation through its Cloud-managed offering, SLT-Mobitel AkazaLMS takes centre-stage as the nation’s leading Learning Management System (LMS). SLT-Mobitel AkazaLMS offers a unique, locally developed, comprehensive enterprise learning solution designed to cater to diverse training needs without compromising on quality.

Commenting on the initiative Chief Enterprise & Wholesale Officer of SLT, Lakmal Jayasinghe said “Especially in today’s competitive environment where human capital is more important than ever, companies need to create a learning strategy that aligns to robust curricula, employing relevant and available learning methods and technology. Addressing this need, SLT-Mobitel AkazaLMS Cloud is an enterprise e-learning solution hosted in Sri Lanka on the top of a private cloud, providing corporate and institutional customers the ability to deliver their own learning material to their users with zero cost infrastructure. With greater convenience and without additional IT resources, customers have access to their own training needs via a simple web browser”.

Empowering corporates and educational institutes, SLT-Mobitel AkazaLMS is a comprehensive locally developed platform, containing a self-portal where the user develops their own e-learning and purchase it as a SaaS product. Especially during these challenging times, when classroom lectures are not possible and distance learning methods vital, the SLT-Mobitel AkazaLMS facilitates exams, assignments, quizzes, etc. tailor-made and customised for corporates and educational institutes targeting their own specific needs.

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LIOC shows stability in earnings and margins compared to volatility during previous years

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First Capital expects stability in LIOC earnings and margins ahead, compared to the significant volatility witnessed during the previous years.

“With the new pricing formula, we expect a stable outlook for LIOC which is currently trading at a TTM PER of 7.5x on FY22 earnings while also trading at a PBV of 1.5x”, they said.

“The government’s implementation of the new fuel pricing formula on 24th May 22 includes all costs incurred in importing, unloading, distributing to the stations and taxes. With that, fuel prices will be revised on a monthly basis, and if necessary, it will be reviewed every two weeks. Accordingly, the next price revision was scheduled for 24th Jun 22. Considering the price revision, In addition to that, Sri Lanka’s Cabinet has approved a bill to impose a 2.5% tax on companies with an annual turnover of LKR 120.0Mn, which will only have a marginal effect on company margins.”

“With regards to investment in joint venture, LIOC has invested in Trinco Petroleum Terminal (Pvt) Ltd (TPT) in Jan-22 and acquired 49% of the stake with CPC which holds 51% of the ownership of TPT in order to develop 61 tanks at the Trincomalee Oil Tank Farm and allied facilities in the Upper Tank Farm of the China Bay Oil Tank Farm. Also, LIOC has entered into a Lease of State Land with the Government of Sri Lanka for a term of fifty years to develop the Lower Tank Farm of the China Bay Oil Tank Farm,” First Capital said.

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Apprenticeship programme in partnership with Hatch MakerStudio and Vocational Training Authority

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From left: : Krishantha Pathiraja, Chairman at Palmyrah Development Board, Florian Manderschied, Head Maker at Hatch MakerStudio, Brindha Selvadurai, CEO and Co- Founder, Hatch, Eranga Basnayake, CEO and Chairman of Vocational Training Authority, Mahesh Ariyarathne, Vice Chairman of VTA

The next generation of Sri Lanka’s industry workforce is currently studying at Technical and Vocational Education and Training institutes (​​TVET) all over the country. Since the manufacturing technology is under permanent development, the requirements for TVET graduates have also evolved. In order to address the industry’s needs for skilled and competent workers, the Vocational Training Authority and Hatch MakerStudio have joined forces to pilot an innovative apprenticeship programme.

The apprenticeship programme is designed for students in the field of mechatronics, robotics, automation and CNC-technologies and is focusing on the upskill, entrepreneurial mindset and problem solving capabilities. Together with industry partners, the selected apprentices will undergo a one month training programme at Hatch MakerStudio before being placed in the companies. The programme comprises of:

Product development training

Software and rapid prototyping training

Problem solving and design thinking exercises

During the course of the apprenticeship, Hatch MakerStudio will provide supervision and support for both the apprentices and companies, in order to ensure effective skills development and utilization of working power. Students with their own specific product ideas and business models can choose Hatch MakerStudio as their place of apprenticeship.

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