Sri Lanka’s stock market records Rs. 22 billion transaction between foreign entities
Canada’s Fairfax Financial has last Thursday (9) bought a 10.7 percent stake in one of Sri Lanka’s premier blue chip companies, John Keells Holdings PLC (JKH), for Rs. 22.7 billion from Malaysia’s sovereign fund Khazanah Nasional Berhad.
Local media reports noted that the deal had boosted investor sentiment and propelled the Colombo bourse turnover to highest since 2008.
In its official disclosure to the Colombo Stock Exchange (CSE), JKH has stated that the buyer was Citigroup Global Markets Ltd., Agency Trading Prop Securities A/C. However market analysts have reportedly linked the account to the Toronto, Ontario-based giant Fairfax.
The seller was Northern Trust Co S/A Broga Hill Investments Ltd., linked to Khazanah.
Fairfax Financial is a financial holding company engaged in property, casualty, insurance and reinsurance, investment management, and insurance claims management.
The Daily FT has reported that Fairfax had first entered Sri Lanka in 2013 via HWIC Asia Fund, accumulating a 15 percent in JKH subsidiary Nations Trust Bank. In 2015, Fairfax had bought 78 percent of JKH-linked Union Assurance’s general insurance business for Rs. 3.7 billion. A year later, it had acquired 100 percent of Asian Alliance General from Softlogic Holdings for Rs. 1.2 billion.
The 10.76 percent stake in JKH amounting to 141.8 million shares was traded at Rs. 160 each and the deal had boosted the Colombo Bourse’s turnover to Rs. 23.6 billion, which is the highest since 2008, according to NDB Equities.
Analysts saw Fairfax investment as a major vote of confidence on the prospects of JKH as well as Sri Lanka.
The positive economic policies pushed by the government of Sri Lanka has resulted in the build up of investor confidence in Sri Lanka. The large scale transaction recorded by the Colombo Stock Exchange stands testament to this fact. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements as well as trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region. Foreign businesses/investors could confidently explore business/investment opportunities in Sri Lanka.
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