LOLC dethrones JKH to be most valuable on CSE

Thursday, 28 January 2021 02:11 - - {{hitsCtrl.values.hits}}

Phenomenal rise in share price puts LOLC market capitalisation at Rs. 246.7 b, surpassing JKH’s figure of Rs. 225.8 b
So far in January LOLC market value has shot up by Rs. 183.4 b
By virtue of 85% shareholding in LOLC, Ishara tipped as first and only person to hold $ 1 b worth of listed stocks in Sri Lanka

LOLC Deputy Chairman Ishara Nanayakkara

Financial services heavy conglomerate LOLC Holdings Plc yesterday dethroned premier blue chip John Keells Holdings (JKH) as the most valuable company on the Colombo Stock Exchange.

This was after a 25% or Rs. 104 gain in LOLC's share price to Rs. 521.25 yesterday, propelling its market capitalisation to Rs. 246.69 billion – an increase of Rs. 49.39 billion from Tuesday.

JKH was second at Rs. 225.8 billion whilst its share price dipped by Rs. 1.50 to Rs. 171.25. Ceylon Tobacco was third at Rs. 208.3 billion after its share price gained by Rs. 9 to close at Rs. 1,112. It was the second time JKH was dethroned from its long-held leadership. Previously CTC surpassed JKH.

LOLC since of late has been establishing new highs weekly as its market capitalisation has shot up by a staggering Rs. 183.4 billion in January so far. LOLC ended 2020 with a market capitalisation of only Rs. 64 billion and was ranked at number eight.

Investor fans of LOLC described its accession to the pinnacle as a ‘historic day’. They hailed LOLC as the country’s most globalised, most profitable and most dynamic listed entity.

By virtue of owning a nearly 85% stake LOLC Deputy Chairman Ishara Nanayakkara, they also claimed he is the first and only person to hold $ 1 billion worth of listed stocks in Sri Lanka.

Some others were less jubilant from overall stock market perspective because LOLC share is illiquid in comparison to JKH. For foreign investors because of JKH’s high liquidity as well as being a diversified conglomerate, it was the proxy for the CSE and Sri Lanka. Though investor fans of LOLC insist foreigners need to relook at LOLC given its poor liquidity and zero dividend policy, that will be a very challenging proposition.

As per a Daily FT analysis, as of Friday last week the combined market capitalisation of 13 companies in which Ishara has control, influence or stakes was a staggering Rs. 470.7 billion.

LOLC Holdings finished FY20 as the conglomerate with highest after tax profit of Rs. 19.2 billion following the hefty one-off profit from the sale of a micro finance company PRASAC in Cambodia.