Alufab gets into price band again

Setting a unique but a dubious record, Alufab became the first ever company to find itself in the SEC’s price band for a second time and that too just a day after the first term ended.

The security on Wednesday, 4 May finished serving its first 10-day price band tenure and yesterday a near 40% rise in its share price to an all time record Rs. 144.80 saw it once again coming the under the SEC directed measure.

Alufab, which specialises in manufacture and fabrication of aluminium products, suffers from a negative networth among other problems.

However the second term luckily would only be for five days (from 6 to 12 May – both days inclusive) after SEC revised the duration with effect from 29 April.

The Daily FT yesterday reported that with Alufab coming free from the first term in the band yesterday speculators were likely to sharpen their focus on the security. It peaked to a high of Rs. 158 yesterday up by Rs. 52.60 or 50% from Wednesday’s closing price. The previous all time high of Alufab was Rs. 106.70, which incidentally was established on 19 April, the day when its first term under the band began. The day before it gained by over 30% to a peak of Rs.100 before closing at Rs. 97, up by 26% from the previous close.

After hitting dizzy heights again yesterday, it settled down thereafter to close at Rs. 144.80 though still up by 37% or Rs. 39.40 on a volume of 227,000 or 5.6% stake of the Company transacted via 776 trades. On Wednesday Alufab gained by 9.11% or Rs. 8.80 on a volume of 83,000 shares.

With accumulated losses of Rs. 105 million, as at December 2010 total capital and reserves of the Company was a negative Rs. 9.2 million, though lower in comparison to Rs. 24 million as at 31March, 2010. In the nine months ended 31 December, 2010 Alufab posted a profit of Rs. 0.5 million as against a loss of Rs. 1.15 million a year earlier. Turnover grew by 218% to Rs. 40.4 million.

Waskaduwa enters Ahungalla

The Citrus Leisure Group subsidiary Waskaduwa Beach Resorts Ltd., yesterday literally entered into Heritance Ahungalla buying a small but an important stake.

The Group picked up 0.6 million shares of Aitken Spence Hotel Holdings (Stock Code: AHUN) investing nearly Rs. 60 million. Of the traded quantity 520,000 shares were done at Rs. 97 each via a crossing. The stock closed at Rs. 96, up by Rs. 6 as against the previous close of Rs. 90.

Citrus Leisure Director Dilith Jayaweera said the investment was made via the subsidiary Waskaduwa Resorts purely on value and as part of an investment portfolio. “We were keen to invest in a good stock outside the Group but within the leisure sector and found value in Aitken Spence Hotels,” added Dilith who didn’t rule out picking up further quantities at the right price.

AHUN is the 18th most valuable stock in the Colombo Bourse with a market capitalisation of Rs. 32.28 billion. The parent Aitken Spence is only 9 places above with a value of Rs. 65.1 billion.  AHUN remained illiquid for years until recently when a sub division of shares on the basis of one into seven boosting the number of shares in issue to 336.3 million from 48 million shares.  In that sense the stake bought by Waskaduwa Beach Resort was only 0.17%.

Early this year in a further sign of booming confidence in the leisure sector as well as the promoters Citrus Leisure Group completed a Rs. 923.5 million private placement to part equity finance two of its planned four star luxury resorts in Waskaduwa and Kalpitiya.

The private placements were by the individual subsidiaries owned by Citrus Leisure – Waskaduwa Beach Resorts Ltd. and Kalpitiya Beach Resorts Ltd. Citrus offered 37.14% stake in Waskaduwa venture and 27.8% stake in Kalpitiya.

The Waskaduwa resort will have 150 rooms and will see an investment of Rs. 1.9 billion whilst Kalpitiya Beach Resort will have 150 rooms built at a cost of Rs. 1.9 billion in addition to self-funded 28 water front villas which will be sold separately on 99-year lease.

Work on both hotels is to be completed within 24 months.