LOLC jumps to sixth slot in value on CSE

• Sharp rise in share price propels financial services-rich conglomerate above Cold Stores, HNB, Nestlé, Sampath Bank and SLT

LOLC Holdings PLC has jumped to sixth place in terms of value on the Colombo stock market, following sharp gains of its share price in past two weeks. 

With Rs. 80.92 billion in market capitalisation, LOLC Holdings has overtaken Cold Stores, HNB, Nestlé, Sampath Bank and Sri Lanka Telecom in market rankings. 

It is yet behind Distilleries, the value of which is Rs. 82.8 billion. With DIST slipping in its price last week, most analysts expect LOLC Holdings to rise further this week. 

With much speculation on its true value, LOLC has however a long way to go to knock down the big guns, i.e. the number one blue chip JKH, at Rs. 216.3 billion, and second-ranked Ceylon Tobacco (CTC), at Rs. 205.1 billion. Apart from DIST, Commercial Bank, which is ranked fourth with Rs. 91.3 billion, and Dialog, at Rs. 104.2 billion, are other stocks ranked above LOLC Holdings.

A fortnight ago, the 52-week highest share price of LOLC was Rs. 133.90. As at end November 2019, with shares at Rs. 117.50, LOLC Holdings’ market capitalisation was Rs. 55.8 billion, and last week’s closing reflects an increase of Rs. 25 billion. 

Given the impending Rs. 108 billion deal on the sale of a controlling stake in a subsidiary—Cambodia’s number one micro finance company (PRASAC)—to a Korean giant, investors have taken early value and trading positions on LOLC Holdings boosting its share price. The market, however, is still waiting for full disclosure.

The rise began during the week ended 27 December 2019, with LOLC Holdings’ share price gaining by Rs. 19 or 15% to close at Rs. 145.70. It hit an intra-week high of Rs. 148.90. That week saw 1.07 million shares of LOLC change hands via 1,261 trades, generating Rs. 150.5 million turnover. 

Last week, the share price peaked to its highest of Rs. 194.90, before settling at Rs. 170.30, still up by Rs. 24.60 or 17%. The week saw 4.25 million LOLC Holdings shares change hands via 6,576 for a Rs. 746.6 million turnover.

Over 80% shareholding of LOLC Holdings PLC is controlled by Deputy Chairman Ishara Nanayakkara and related parties. Its public float is 15%, held by 2,766 shareholders. As at 30 September 2019, the public float adjusted market capitalisation was Rs. 8.9 billion.

Driven partly by speculation, last week’s league of top five gainers percentage-wise was dominated by LOLC Group firms - Eden Hotel Lanka (15.6%), Browns Investments (15%) and Browns PLC (14.7%). LOLC Holdings accounted for 25% of the week’s turnover of Rs. 750 million, followed by 21% by Browns Investment. LOLC was mostly foreign selling, amounting to 1 million shares.