German, Dutch funds boost Colombo stock market

Friday, 8 March 2013 00:54 -     - {{hitsCtrl.values.hits}}

  •  DEG and FMO buy collective 38% stake in Asian Alliance Insurance for Rs. 1.8 b; year-to-date net foreign inflow reaches Rs. 2.4 b

German and Dutch funds yesterday boosted the Colombo stock market as well as the financial services industry when they invested Rs. 1.8 billion to acquire a strategic collective stake of 38% in Asian Alliance Insurance Plc for Rs. 1.8 billion.

The stake amounting to 14.25 million shares were sold by Softlogic Holdings Plc and Softlogic Capital Plc at Rs. 128 per share to Deutsche Investititions-Und Entwicklungsgesellschaft (DEG), and Nederlandse Financierings Maatschappij Voor Ontwikkelinhslanden NV (FMO).

The deal was first inked and announced in December last year subject to certain conditions being duly fulfilled.

Selling broker was NDB Stockbrokers whilst buying brokers to the deal were Acuity Stockbrokers (DEG) and John Keells Stock Brokers. (FMO)

Analysts noted the investment and resultant confidence by the two European financing agencies augured well for the stock market as well as the overall financial services industry, including insurance.Inclusive of the mega deal, the Colombo Bourse enjoyed Rs. 2.1 billion net inflow, bringing the year-to-date figure to Rs. 2.4 billion, according to Softlogic Stockbrokers.

NDB Stockbrokers said foreign interest was also seen in Cargills Ceylon while the market strengthened further on interest witnessed in banking sector counters such as Hatton National Bank non-voting and Commercial Bank non-voting.

Foreign buying, as well as relatively better local investor sentiments, boosted the stock indices which had its intra-day dips too, whilst turnover amounted to Rs. 2.5 billion..

Ceylon Tobacco Company (+19.4%), Nestle Lanka (+3.5%) and Carsons Cumberbatch (+2.3%) weighted heavily on the index performance.

Cargills saw 1.5 million of its shares traded for Rs. 237 million with the counter transacted several above 100,000 on-board deals during the morning session. Cargills traded lower with a dip of 0.2% to end at Rs. 151.

In addition, premier blue chip John Keells Holdings witnessed significant investor play supported by a single 194,000 on-board transaction. The counter traded flat to end at Rs. 234.1.

Retail activity largely centred on Nation Lanka Finance, PC House and Janashakthi Insurance.