Melstacrop Managing Director Amitha Gooneratne rings the symbolic bell at the Colombo Stock Exchange to mark the opening of trading yesterday. Others from left: Melstacorp Director Royle Jansz, CSE CEO Rajeeva Bandaranaike, CSE Chairman Vajira Kulatilaka, Melstacorp Director Capt. Jagath Kahanda, Melstacorp Corporate Consultant Damien Fernando and Melstacorp Director Vyjayanthimala Senaratne – Pic by Lasantha Kumara

The newest diversified holding to be listed Melstacorp Ltd., saw a negative start with its share price declining 14% on debut in a declining market overall.

With a reference price of Rs. 69, the stock opened trading at Rs. 65 which was the intra-day highest before closing at Rs. 59.30, down by Rs. 9.70. MELS saw 716,175 of its shares changing hands via 381 trades. However it accounted for the highest turnover of Rs. 43 million yesterday.

The listing of Melstacorp by way of an introduction follows a decision by the shareholders of the Distilleries Company of Sri Lanka to establish Melstacorp as the holding company of the group, marking a modification in the ownership structure. 

In a year when the market has lost 10% in value and many de-listings, the entry of Melstacorp was welcomed. The Colombo Stock Exchange marked the occasion by inviting the 295th listed entity for a special bell ringing ceremony.

Melstacrop Managing Director Amitha Gooneratne, Directors Royle Jansz, Capt. Jagath Kahanda, Vyjayanthimala Senaratne, Corporate Consultant Damien Fernando and the senior management were present at the ceremony while the CSE was represented by Chairman Vajira Kulatilaka, Chief Executive Officer Rajeeva Bandaranaike and the Senior Management. Other related senior representatives from the financial services sector were also present at the event. 

Speaking at the event, CSE Chief Kulatilaka noted that the company’s significant market value, diversification and considerable public offering place the introduction of Melstacorp as an important development in the capital market. He went on to state that the company would present both local and international investors with an opportunity to engage in national industries and sectors, as a result of the company’s many diversified interests. 

Melstacorp MD Gooneratne, speaking on behalf of Melstacorp, acknowledged the stakeholders that worked through the process that resulted in a successful restructuring of the organisation and outlined its commitment to satisfying and exceeding the expectations of the shareholders and all stakeholders.

Commenting on maintaining the company’s diversified interests and income generation going forward, Gooneratne said: “The greatest challenge for Melstacorp would be to blend the fusion of the income the group receives through its different sources. Our main objective is to ensure that the income from the non-alcoholic beverage sector becomes almost equal, which would ensure an appropriate blend of revenue streams.” 

Melstacorp Ltd., is a diversified conglomerate domiciled in Sri Lanka with its business interests spanning beverages, plantations, telecommunication, financial services and other diversified sectors. The Distilleries Company of Sri Lanka Plc, Balangoda Plantations Plc and Browns Beach Hotels Plc, which are listed on the CSE, are subsidiaries of the Melstacorp Group. Furthermore CSE listed conglomerate Aitken Spence Plc and Madulsima Plantations Plc are associate companies of Melstacorp.

Colombo stock market suffers 10% fall in 2016

Reuters: Sri Lankan shares fell on Friday, posting a yearly decline of about 10%, in thin trade due to year-end holidays, while investors waited for directions from the central bank on the rupee and interest rates. 

The Central Bank is most likely to keep its key interest rates steady at a monetary policy meeting later in the day, even as some economists expect further tightening to ease pressure on the rupee following a rate hike by the U.S. Federal Reserve earlier this month, a Reuters poll showed. 

Speculation over possible depreciation of the rupee and rate hikes weighed on sentiment, stockbrokers said. 

The Colombo stock index closed 0.28% lower at 6,228.26, declining 9.7% in 2016, its second straight yearly fall. 

In terms of dollar value, market capitalisation fell 13%, making Sri Lanka a worse performer than emerging Asian markets like Malaysia, Thailand, Indonesia and Singapore. 

Stockbrokers said factors like failure to attract foreign direct investments and lack of investor confidence due to a reversal in some budget policies weighed on the market this year. 

“We are going with positive expectations, though it is going to be a challenging year for all,” a stockbroker said asking not to be named. 

“Politically, the Government has to prove its policies while the private sector will see some challenges amid possible volatile external environment.” 

Foreign investors sold a net Rs. 6.4 million of equities on Friday, but purchased a net Rs. 633.5 million in 2016, compared with a net sell of Rs. 4.43 billion last year. 

Turnover stood at Rs. 202 million, less than a third of this year’s daily average of Rs. 737.2 million. Last year’s daily average was Rs. 1.06 billion. 

Large cap Ceylon Tobacco Co Plc fell 0.6%, while Lion Brewery (Ceylon) Plc lost 3%.