Japan’s SBI buys 3% of NDB for Rs. 825 m

Japan’s SBI Group yesterday bought a 3% stake in NDB for Rs. 825 million, reinforcing its renewed interest in Sri Lanka as well as boosting the Colombo Bourse.

NDB saw 5.17 million of its shares traded for Rs. 853 million, accounting for 48% of the day’s turnover at the CSE. SBI had picked up 5 million shares at Rs. 165 each. NDB’s share price closed at Rs. 164.90, down by 20 cents.

Seller was speculated as Asian Discovery Master Fund which as at June 2016 had 7.8 million shares of 4.78% stake.

Led by gains in blue chip, the CSE rose to a three-month closing high yesterday.

SBI Group had previously held stakes in Sri Lanka’s financial sector but had subsequently sold out. In that context market analysts welcomed its fresh interest.

The acquisition also comes hot on the heels of SBI announcing a deal to buy 25% strategic stake in Sri Lankan brokerage First Guardian Equities via a private placement. 

The MOU to this effect was signed by the Representative Director, President and CEO of SBI Holdings Yoshitaka Kitao and Managing Director/CEO of First Guardian Equities Ltd. Rohan Goonewardene earlier this month. This transaction is due to be concluded shortly after obtaining the required regulatory approvals.

The SBI Group of Japan has grown into a leading financial services provider by creating value through a dynamic network of group company collaboration and synergies. The Group’s assets have grown from JPY 50 million since its inception in 1999 to over JPY 400 billion. It currently owns six publicly-listed companies.

Yesterday the benchmark Colombo stock index ended 0.23%, or 15.30 points, firmer at 6,593.25, its highest close since 20 May.

Foreign investors, who have been net sellers of Rs. 3 billion ($ 20.63 million) of shares this year, bought a net Rs. 343.2 million in their highest purchase since 1 August, extending the net foreign inflow in the past 16 sessions to Rs. 1.8 billion worth of equities according to Reuters.

“Investors are more focused on blue chips such as John Keells,” said Dimantha Mathew, Head of Research at First Capital Equities Ltd., adding that profit-taking had dried up.

Turnover stood at Rs. 1.78 billion, well above this year’s daily average of around Rs. 739.1 million.

Shares of John Keells Holdings rose 0.96%, while Ceylon Tobacco Company gained 1.09%.

Commercial Bank of Ceylon Plc, the country’s biggest listed lender, rose 1.46%, while National Development Bank ended 0.12% weaker.