Mitsui Sumitomo Insurance Co Ltd (MSI), the largest insurance company in Japan, yesterday bought 1.2 million Ceylinco Insurance PLC shares amounting to 6 percent, from CIESOT, the employee share ownership trust of Ceylinco Insurance PLC.
The shares were sold at Rs.1,602 per share and the total transaction amounted to Rs.1.92 billion.
In May, Shriram City Union Finance Ltd, a Chennai-based non-banking finance company, bought a similar stake in Ceylinco Insurance from CIESOT.
In a communiqué issued by Ceylinco Insurance regarding the transaction, the company said they were pleased with MSI entering the local market through Ceylinco Insurance.
MSI is considered the largest insurance company in Asia and holds an A+ rating.
Further, the communiqué said Ceylinco Insurance had maintained a strong business relationship with MSI for over 20 years fostering mutual trust and that Ceylinco Insurance will be able to offer an exemplary service with very competitive pricing particularly to the Japanese investors and projects here in Sri Lanka as well as others.
Ceylinco Insurance is confident that this synergy will add further value and bring in more expertise to its activities and operations, it further stated.
This is the first-ever investment by a Japanese insurance company in Sri Lanka and MSI is in the process of enhancing its business network in the South Asian region.
In a similar statement, MSI said that they will promote Ceylinco Insurance to increase penetration in Sri Lanka and that they will be able to work more closely with the Japanese corporates operating in Sri Lanka. It also added that Sri Lanka is attracting much attention from Japanese investors after the visit of Japanese Prime Minister Shinzo Abe, last September.
Sources told Mirror Business that MSI representatives were here in Colombo a couple of weeks back, exploring investment opportunities.
Shares close at 5-month high
REUTERS: Sri Lankan shares gained more than 0.7 percent in high turnover yesterday, closing at their five-month peak, as expectations of strong corporate earnings and political stability after the August 17 parliamentary polls lifted investor sentiment.
Turnover rose to Rs.3.65 billion, its highest since May 14 and well above this year’s daily average of Rs.1.09 billion, on block deals.
The main stock index ended firmer 0.73 percent, or 52.90 points, at 7,313.97, its highest since February 26.
“Trading was dominated by heavyweights, while block deals pushed the turnover higher,” said First Capital Equities (Pvt.) Ltd Research Manager Dimantha Mathew.
“Market is very positive, specially on the earnings. We expect the market to continue the uptrend.”
Gains were led by large caps. Ceylon Tobacco Company PLC rose 2.85 percent after it reported a 16.6 percent rise in net profit for the April-June quarter, while conglomerate John Keells Holdings PLC gained 1.69 percent.
Foreign investors, who have bought a net Rs.1.4 billion worth of shares so far this year, were net buyers of Rs.1.95 billion yesterday.
Analysts expect local companies to post strong results for the April-June quarter. Expectations of political stability after the August 17 parliament elections also helped sentiment, they said.
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