Thailand's Group Lease buys 30-pct stake in Sri Lanka's Commercial Credit in Rs10bn deal

ECONOMYNEXT – Thailand's Group Lease Holdings bought a 30% stake in Sri Lanka's Commercial Credit and Finance at Rs111 a share in a Rs10.6 billion deal, a stock exchange filing said.

Stock brokers Asia Securities said its client Group Lease Holdings bought 95,390.500 shares of Commercial Credit and Finance, a 29.99% stake.

Commercial Credit and Finance closed at Rs60.60 Thursday after trading in the Rs60.30-67 range.

The deal was the largest transaction on the Colombo bourse since March 2012.

Asia Securities handled the entire buy side and almost 80% of the sell side of the deal, giving it a leading market share for foreign trading, sources said.

Colombo Stock Exchange Market Review – 08th Dec 2016

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Colombo Stock Exchange Trade Summary 08-Dec-2016

Colombo bourse edged higher on Thursday backed by high investor interest in selected blue-chips. However, the highlight of the day was the strategic transaction in Commercial Credit, which saw a 95.4mn shares changing hands at LKR 111.00. Not only had the transaction pushed the turnover to near 5-year high, it turned the year-to-date net foreign outflow to a net inflow of LKR 997mn.

As notified earlier, the transaction was executed in accordance with the share purchase agreement between BG Investments, Creations Investments, Mr.S.L. La France (Sellers) and Group Lease Holdings (Buyer). However with the conclusion of the transaction, the share price of Commercial Credit plummeted in the normal board to LKR 60.60, -5.9%.

The benchmark ASI inclined 10.52 index points (+0.2%) to 6,337.82 while blue-chip S&P SL 20 index gained 22.07 index points (+0.6%) to 3,555.91. The index was driven up by the late-hour gains in John Keells Holdings (LKR 155.00+2.6%) along with Hemas Holdings (LKR 98.00,+2.1%) and John Keells Hotels (LKR 11.20,+4.7%). Shares of Sri Lanka Telecom (LKR 35.00,-2.8%), Commercial Credit and Carsons Cumberbatch (LKR 178.00,-3.0%) lead the losers. Market breadth was positive with gainers offsetting losers 69 to 59.

Market turnover touched near 5-year high of LKR 12.0bn. 88% of the turnover came from Commercial Credit (LKR 10.6bn) while the balance LKR 1.4bn was supported by the activities in Dialog Axiata (LKR 540mn), John Keells Holdings (LKR 533mn) and Hemas Holdings (LKR 70mn). Crossings in Commercial Credit, John Keells Holdings (2.1mn shares at LKR 152-155.00) and Hemas Holdings (0.4mn shares at LKR 98.00) contributed 91% of the turnover.

John Keells Holdings and Commercial Credit dominated the market activity today and accounted for 30% of the trades. However, Renuka Agri Foods (LKR 3.20,+6.7%), Ceylon Cold Stores (LKR 780.20,+0.5%) and Access Engineering (LKR 25.20,+0.8%) managed to attract some investor interest in today’s session.

Foreign activity shot up to 85% of the market turnover as a result of the transactions in Commercial Credit. Accordingly, net foreign inflow in today’s session stood at LKR 2.9bn, with notable net inflows in Commercial Credit (LKR 2.5bn), John Keells Holdings (LKR 422mn) and Lion Brewery (LKR 18mn) while top net outflow was seen in Hemas Holdings (LKR 15mn).
Source: LSL

Sri Lanka shares gain on foreign buying; Thai Group's deal lifts mood

Reuters: Sri Lankan shares rose on Thursday as a stake buy in Commercial Credit and Finance Plc by a unit of Thailand's Group Lease Plc lifted the mood while foreign investors bought domestic stocks and turned net buyers so far in the year.

Group Lease Holdings Pte Ltd, a subsidiary of Thailand's Group Lease Plc purchased 95.4 million shares or 29.99 percent in Commercial Credit And Finance Plc, Asia Securities, which was directly involved in the deal, said in a disclosure to the bourse.

The transaction was valued at 10.59 billion rupees ($71.31 million), according to a statement by Group Lease Holdings Pte Ltd.

Foreign investors bought a net 11.7 billion rupees ($78.79 million) worth of shares on Thursday, reversing the year-to-date net foreign outflow to 996.68 million rupees worth of net investment in shares.

Turnover was 12 billion rupees, its highest since March 16, 2012, compared with this year's daily average of 748.9 million rupees.

Shares of Commercial Credit and Fiance Plc, however, ended 5.90 percent weaker.

The Colombo stock index ended 0.17 percent at 6,337.82, edging up from its lowest close since Dec.2 hit on Wednesday. The bourse gained 1.17 percent last week, recording its first weekly gain in four weeks.

"It was a fairly dry year, but today's trade will give a bit of confidence to the investors," said Kanishka Perera Head of Research at Asia Securities.

"There could be a slight boost to the turnover levels in the coming days and this shows that still there is investor confidence in the market."

The deal, according to brokers, is a positive as it assures investors of continuing foreign appetite towards Sri Lanka at a time of worries over the proposed increases in various taxes and fees affecting growth.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year to meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

Shares of conglomerate John Keells Holdings Plc rose 2.58 percent while Hemas Holdings Plc rose 2.08 percent. 

($1 = 148.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)