Business leader and top entrepreneur Dhammika Perera’s control in Hayleys Plc, one of Sri Lanka’s few multinational diversified blue chips, topped the 29% mark by yesterday.
Analysts said that Dhammika’s personal holding in Hayleys was around 25% and that he controls another 4% via connected companies.
Yesterday around 500,000 shares of Hayleys were bought by LB Finance and Amaya Resorts at Rs. 340 each whilst on Monday slightly over one million shares were picked up by Royal Ceramics, also at the same price. All these companies are connected to Dhammika given his shareholdings.
On Tuesday, Dhammika had acquired around 669,000 shares also at Rs. 340 each. Hayleys last week closed at Rs. 341.80, down by Rs. 8.20 whilst its 52-week highest price is Rs. 360.
Dhammika first entered Hayleys in mid-June 2008 with the acquisition of 7% stake held by Carson Cumberbatch Group at Rs. 125 per share. After he increased it to over 15%, Dhammika was invited to the Board in 2008 whilst his friend and high networth investor Nimal Perera was inducted to Hayleys Board subsequently. Early this year Dhammika accounted for an effective control of around 23%.
Company analysts said that whilst Dhammika’s stronghold is over 29%, separately several Hayleys Group companies owns around a 9% stake, apart from ESOP holding 9% and Hayleys former iconic Chairman D.S. Jayasundera’s Trust holding 11.6% bringing this block of shareholding to around 29%.
Founded in 1878 as Chas P. Hayley & Company, Hayleys is described as one of the largest Sri Lankan multinationals. Its portfolio of globally competitive core businesses includes global markets and manufacturing, agriculture and agri business, transportation and infrastructure and consumer products and leisure. Hayleys also accounts 2.45% of Sri Lanka’s export income.
In the first quarter of 2010/11, Hayleys pre-tax profit grew 42% to Rs 520.8 million on the back of improved performances from most sectors and consolidation in others. Profit after tax for the period grew 50% to Rs. 340.4 million on a turnover of Rs. 11.7 billion, which was up 58% over the corresponding three months of last year. Profit attributable to equity holders of the company improved by 20%, to Rs. 150.7 million.
Stock market vies for stability
The Colombo stock market had a day of uncertain stability as the benchmark ASPI ended flat though the active MPI dipped midst a respectable Rs. 2.8 billion turnover.
“The indices ended marginally below the last closing due to slowed down activity levels mainly driven by local retailers despite morning gains,” John Keells Stock Brokers said. ASPI at 6,622.08 was down by 6.75 points (-0.10%) and MPI at 7,139.07 was down by 27.81 points (-0.39%). Volume traded for the day was 47.4 million shares against the 12-months average daily volume of 62.8 million shares.
“Colombo Bourse witnessed high volatility in the market today where it gained nearly 180 points during the early hours of trade but eventually ended in the red due to investors’ cautious play,” Asia Securities said.
“Volatility continued in the market as the prices gained during early trading only to decline gradually during the day. Bearish sentiment may continue tomorrow,” NDB Stockbrokers opined.
On Wednesday the market hit a one-month low on panic selling due to a long overdue correction in Asia’s best performing and most expensive market this year, before recovering to the close because of buying by state investment funds.
It still remains Asia’s best performer in 2010 with a 95.6 percent gain as the island’s economy rebuilds following the end of the civil war in May 2009. It has shed 8.1 percent since hitting an all-time high of 7,207.75 on 4 October.
Analysts said investors are still worried of a further plunge, so they expect selling pressure to continue alongside sales to settle margin calls.
The 14-day relative strength index (RSI) of the CSE is at 54.1, between the neutral limits of 30 and 70, Thomson Reuters data showed. The index was at 92.4 on 1 October and had been in the overbought zone from 18 August.
Sri Lanka’s share index is trading at the highest forward price-to-earnings ratio in Asia and global emerging markets at 21.2 times, compared with 13.4 for all of Asia and 12.5 for global emerging markets, Thomson Reuters data showed.
Best performing sector was Telecommunication (+3.24%) whilst worst performing was Investment Trusts (-3.77%). Banks Finance & Insurance and Diversified sectors were the highest contributors to the market turnover, while the sector indices declined by 0.14% and 1.09% respectively.
Lanka Orix Leasing was the highest contributor to the market turnover with a crossing of 300,000 shares at Rs. 1,325. Price inclined by Rs. 8.90 (0.68%) and closed at Rs. 1,281.
John Keells Holdings also contributed to the market turnover with a crossing of 150,000 shares at Rs. 325, while the price declined by Rs. 3.50 (1.09%) and closed at Rs. 315.
Another four major crossings for were also recorded for 210,000 shares of Sampath Bank at
Rs. 248; 426,200 shares of Hayleys at Rs. 340; 110,000 shares of Ceylon Theatres at Rs. 190 and 300,000 shares of Seylan Bank at Rs.102, NDB said.
Asia Securities said LOLC spearheaded the market contributing circa 15% of the day’s turnover through institutional interest whilst heavy weight John Keells Holdings and Ceylon Theatres witnessed high net worth participation. Further, institutional interest was also evident in Sampath Bank and Hayleys whilst retail interest was seen in counters such as Seylan Bank (Non Voting), Touchwood Investments and Hemas Holdings today.
Meanwhile the rupee edged up to 111.82/85 per dollar from Wednesday’s 111.84/85, on thin dollar sales by exporters in the absence of importer demand, dealers said.