Wednesday, 19 November 2014 00:29
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Captain picks up 2% stake
John Keells Holdings Plc (JKH) yesterday exited Access Engineering Plc (AEL) at a profit, with Captains family among buyers.
AEL saw 46 million of its shares or slightly over 4% traded for Rs. 1.86 billion.
JKH sold 40 million shares at Rs. 40.10 each via 17 crossings, and booked around Rs. 600 million in capital gain. JKH was among investors who took up AEL shares during the pre-IPO private placement at Rs. 25 each.
The Daily FT learns Captains had bought around 20 million AEL shares. Among other buyers were institutional investors in financial services. Deals on AEL accounted for 42% of yesterday’s turnover.
Captains had five million shares (0.5%) as at end June 2014 but had sold it subsequently and didn’t figure in the Top 20 shareholders list in September 2014.
LOLC Securities Research yesterday recommended AEL as buy. “We assume a cost of equity of 14% taking the current market conditions into account. Applying our forecasts, which includes an average 16% long-term NP margin target and a terminal free cash flow growth rate of 5%, our FCFE model values the share at LKR 47.20. At the current value the share is traded at a forward PE of 12.78 X and a forward PBV of 2.25X,” LOLC Securities said.
“We forecast the post-war construction boom to prevail for another 10-15 years in Sri Lanka and thus we expect Access Engineering PLC (AEL) to reap substantially from the opportunity, given its high expertise and credentials over its peers. AEL’s well-diversified business portfolio consisting motor sector and commercial property also reduces the risk, while the group is in a safe position to further expand backed by its strong balance sheet,” it added.
