Foreign buying in Hemas boosts YTD inflow to Rs. 9 b

Thursday, 3 July 2014 00:00 - - {{hitsCtrl.values.hits}}

Heavy foreign buying into Hemas Holdings Plc yesterday propelled the year-to-date net inflow to the Colombo Stock Exchange (CSE) to near Rs. 9 billion. Hemas saw 34.7 million of its shares traded for Rs. 1.56 billion, of which 33.5 million shares (6.5%) were net foreign buying. A block of 33.5 million shares was done at Rs. 45 each via nine crossings. Hemas’ foreign holding is now 73.25 million shares of 14.2%. Premier blue chip JKH and Chevron Lanka also saw some net foreign buying though small in value. Foreign investors were net buyers for a seventh straight session according to Reuters, which put the year-to-date net inflow at Rs. 8.93 billion. NDB Stockbrokers said price gains witnessed in index heavy counters such as CTC and JKH raised the market to close in the positive territory. JKH closed up 1.44% or Rs. 3.20 to Rs. 225.50. CTC closed at Rs. 1,076.30, up by Rs. 23. Yesterday’s gain brought the All Share Index’s year-to-date return to 8.79% whilst the S&P SL 20 Index is now up 9.62%. The ASI closed at its highest close since 4 June 2013. “Stockbrokers said foreign investors see value in shares, while local investors are gradually shifting to risky assets from fixed ones,” Reuters said. “If foreign participation continues and there are no unnecessary hiccups, the market will continue to run,” said a stockbroker asking not to be named, according to Reuters. Brokers said State funds like the Employees Provident Fund (EPF) and Sri Lanka Insurance sold their stakes to foreign investors. They expect the State funds to buy stocks with the funds they got from Wednesday’s dealings. As at 31 March, 2014, EPF held 5.3% stake of 27.2 million shares and SLIC held 0.9% or 4.7 million shares. ETF also held 0.86% or 4.4 million shares. Reuters report also said analysts said foreign buying could continue due to lower inflation after Government data showed annual inflation eased to 2.8% in June, its lowest since February 2012, down from 3.2% a month earlier. The yields on Treasury bills edged down further at a weekly auction on Wednesday. However, analysts had said Reuters investors are concerned over the recent ethnic violence and possible implications of a Government Spokesman saying Sri Lanka bought Iranian crude via third parties. The market has been on a rising trend since late February due to continued foreign buying and lower interest rates, Reuters reported.

Adam Investments gets bullish, triggers two takeovers on PCHH, PC Pharma

Adam Investments Chairman

Dr. Ali Asger Shabbir Gulamhusein

Reflecting its bullishness on equities as well as its sectors, new kid Adam Investments Ltd. yesterday triggered two takeovers involving PCH Holdings Plc (PCHH) and PC Pharma Plc. (PCP). It acquired 83 million shares or 33% of diversified holdings PCHH, thereby increasing its stake to nearly 43%, whilst on PCP it bought 5.5 million shares or 5.4%, effectively upping its stake to 31.15%. The SEC Takeovers and Mergers Code threshold is 30%. PCHH saw in total 95.7 million of its shares traded for Rs. 192 million, thereby becoming the second highest in terms of turnover. PCHH finished the day at Rs. 2.10, up by 30 cents (it hit an intra-day high of Rs. 2.20) whilst PCP, which saw 13.7 million of its shares traded, closed 20 cents down to Rs. 1.90 after hitting an intra-day high of Rs. 2. Adam Investments last week bought a 26% stake in PCP for Rs. 37 million with previous largest owner British American Technologies Ltd. being among major sellers. Previous controlling shareholder of PCHH was its Chairman S.H.M. Rishan via his Dynaris Holdings Ltd., and personal holding pledged to NDB as of end December 2013. Orient Garments also saw some activity with 1.3 million shares traded and price up Rs. 7.80 to close at Rs. 27.10 with speculation rife that a related party to Adam was on the buying side. Adam holds a 40% stake in Orient Garments Adam Investments’ strategy appears to be consolidation and optimism of reviving both PCHH and PCP. Adam, which had its debut on the CSE in early June, also has equity investments in Ceylon & Foreign Trades Plc and substantial shares of private limited liability companies, namely Network Communications Ltd., Adam Metals Ltd., Adam Apparels Ltd., Adam Automobiles Ltd. and Adam Air Conditions Ltd. Adam, which raised Rs. 300 million via its IPO at Rs. 3 per share, yesterday saw its share price peak to Rs. 5 before closing at Rs, 4.90, up by 20 cents. Adam Investments’ Board of Directors – led by Dr. Ali Asger Shabbir Gulamhusein – believes uniting these entities under the Adam Investments umbrella will strengthen all, allowing each company to thrive in their respective sectors while synergies and streamlined management practices between companies could help create a sustainable environment for growth and excellence.