Sri Lanka Insurance Life Fund buys 4.4% Spence stake from General Fund for Rs. 4 b

Monday, 11 October 2010 23:46 -     - {{hitsCtrl.values.hits}}

In an in-house deal Sri Lanka Insurance Corporation’s (SLIC) Life Fund yesterday bought a 4.4% stake in Aitken Spence Plc for Rs. 4.1 billion from the General Fund.

The deal involving 18 million shares was executed at Rs. 230 each, which incidentally was the highest price at which Spence traded yesterday.

In total 19 million shares of Spence were transacted via 1,054 trades generating a turnover of Rs. 4.36 billion accounting for 68% of the day’s turnover of Rs. 6.8 billion.

Spence closed at Rs. 216.20, up by Rs. 3.25. Its shares began trading yesterday following the impressive one into 15 share split. Its number of shares in issue rose to 406 million as opposed to 27 million. Its last traded price was Rs. 3,190.

Among buyers yesterday was Employees Trust Fund (ETF) which had picked up around 100,000 shares at Rs. 210 each. There had been several institutional as well as high networth individual investors on the buying side whilst foreign fund Arisag had sold a few shares as well.

As at 30 June, 2010, the SLIC General Fund held around 11% stake in Spence and analysts speculated the part sale yesterday for it wanting cash and book profit though it was at the expense of the in-house Life Fund.

Others noted the part sale was more to do with realignment of SLIC’s investment portfolio.

ETF wasn’t in the top 20 shareholders list as at June 2010 whilst EPF was holding a 4% stake.

Deals on Spence were the sparkle yesterday in the market which despite early gains closed flat.

“Prices gained in early trading only to close flat, as selling pressure increased. This volatile nature was witnessed last week as well. Activity level has also decreased from the past few weeks,” NDB Stockbrokers said.

Diversified and Banks Finance & Insurance sectors were the highest contributors to the market turnover. Diversified sector index inclined 0.94% while Banks Finance & Insurance sector index decreased by 0.40%.

DIMO also contributed (Rs.  462 million) to the market turnover with a crossing of 500,000 shares at

Rs. 911.20 while the price appreciated by Rs. 37.90 (4.16%) and closed at Rs. 950.

The market also saw four other crossings — 578,000 shares (100,000 at Rs. 400 and 478,000 at

Rs. 399.50) of HNB Bank. Two crossings were recorded for 175,000 shares at Rs. 280 of Commercial Bank.

Three more crossings were also recorded (100,000 shares at Rs. 1,400 of Lanka Orix Leasing; 100,000 shares at Rs. 275 of Brown & Company; 2,804,200 shares at Rs. 21 of John Keells Hotels).

Premier blue chip JKH closed up Rs. 4.50 to Rs. 325.50 whilst LOLC gained Rs. 27.90 to close at  Rs. 1,358.40.

Ceylon Leather warrants enjoyed the top two slots of biggest gainers percentagewise followed by Vallibel Finance, which is at the tail end of its 15-day 10% price band duration.