CSE achieves historic benchmark: Market cap crosses Rs. 3 trillion

Thursday, 11 September 2014 00:37 - - {{hitsCtrl.values.hits}}

Market’s return crosses 20% year to date

The market capitalisation of the Colombo Stock Exchange (CSE) crossed Rs. 3 trillion for the first time in the history of the Exchange yesterday. At the close of trading, market capitalisation was at Rs. 3,006.7 billion or Rs. 3 trillion. The market capitalisation measures the market determined value of all listed voting shares. This exceptional performance comes in the wake of a series of positive achievements for the CSE over the past few months with the ASPI crossing the 7,000 mark in August and the S&P SL20 crossing the 3,500 mark in June this year (for the first time since its launch in 2012). The market is also performing positively in comparison to regional markets, being within the top six best performing markets in the region, with the ASPI showing a year-to-date growth of 21.1% and the S&P SL20 showing a year to date growth of 22.2%. During the course of 2014 there have been five equity IPOs, one equity introduction and six debt IPOs. The five equity IPOs raised a total of Rs. 2,693.8 million, the highest since 2011. “The performance of the CSE over the past few months is a clear indication that confidence in the market, from both foreign and domestic investors, is growing. The CSE along with the Securities and Exchange Commission have ensured a competitive market which is strictly regulated and therefore attracts both savvy investors and high value companies,” CSE Chairman Vajira Kulatilaka said. “The Foreign Investor Forums conducted by the CSE and SEC in the past year in Singapore, London and most recently New York, have informed international investors of the value proposition in the Sri Lankan capital market and thereby attracted foreign funds which have contributed positively to the performance of the Market,” CSE CEO Rajeeva Bandaranaike. The Colombo Stock Exchange (CSE) operates the only share market in Sri Lanka and is responsible for providing a transparent and regulated environment where companies and investors can come together. The CSE is a company that is limited by guarantee established under the Laws of Sri Lanka. The CSE is licensed by the Securities and Exchange Commission of Sri Lanka (SEC) and is a mutual exchange consisting of 15 members and 16 trading members. All members and trading members are licensed by the SEC to operate as stockbrokers.

Dr. Senthilverl buys 6.5% stake in Union Bank for Rs. 445 m, Sampath exits

High net worth but low profile investor Dr. T. Senthilverl yesterday picked up a 6.5% stake in Union Bank Plc (UBC) for Rs. 445 million and the move boosted sentiments, pushing the stock price further. The market saw a total of 23.6 million UBC shares traded for Rs. 485 million. Of that quantity 21.7 million shares were done via crossing at Rs. 20.50 each. UBC hit an intra-day high of Rs. 21.70 before closing at Rs. 21.20, up by 70 cents. Dr. Senthilverl is not a newcomer to UBC as he is believed to be one of the original shareholders though not figured in the top 20 list. The seller was Sampath Bank and with yesterday’s move it has exited from UBC. As at June 2014, Sampath Bank was the second largest shareholder with a 7.5% stake. Prior to yesterday it had shed a smaller stake. Analysts said the exit by Sampath made sense as the stake remained passive. With banking sector consolidation likely to gather momentum in 2015, Sampath Bank is likely to be focused elsewhere. Speculation has been Sampath will look at Pan Asia Bank, with control of both entities held by business leader Dhammika Perera. The exit also comes after UBC struck a mega deal with TPG Capital, under which the the USA-based global private investment firm with $ 60 billion under management will take up an over 70% stake in stages through a combination of primary and secondary shares and warrants. In August the UBC Board of Directors resolved to issue by way of a private placement 742,156,249 ordinary voting shares of the bank at a consideration of Rs. 15.30 per share and also resolved to issue to the investor, simultaneously with the issue of the private placement shares, 218,281,250 warrants at a consideration of Rs. 0.30 per warrant, conferring the investor with the right to subscribe to one new ordinary voting share per warrant within a period of six years from the issue of such warrants at a exercising price of Rs. 16 per share. This investment results in Union Bank as a standalone entity to be placed second in stated capital in the banking industry and be within the top five private banks in Sri Lanka with regard to equity. Under the agreement with UBC to acquire majority control of 70% at Rs. 15.30 per share (almost equal to UBS’s book value), TPG will be paying Rs. 25 per share in the subsequent mandatory offer to minority shareholders.