Why directors selling FLCH

cOrE · 1 Why directors selling FLCH Fri Jun 10, 2011 8:02 pm

cOrE

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Does anyone know as to why the directors are dumping such large quantities of FLCH shares at the lowest price..?
Will this bring the price even further..?
I do not believe in rallies though....
but previous articles on this page had said that there is going to be a rally soon...
this counter seems very ironic to me presently...

smallville · 2 Re: Why directors selling FLCH Fri Jun 10, 2011 11:10 pm

smallville

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EPS has improved from 0.09 to 0.46 - over 500% increase year on year. The increase has support from comparatively lower COS.

As per the latest news, director IC Nanayakkara has sold 33Mn shares it seems.
http://www.cse.lk/cmt/upload_cse_announcements/841307702094_.pdf

On the other hand, the above sale is highly suspicious to me, he had all the opportunities to sell it at the launch of IPO and even after so many days when this was stagnated around 5.30-5.50 but he has not done it.
Looking at this on another angel, selling at this point may trigger a panic situation and ppl might start selling even below the IPO price as directors are also selling and wat we witnessed today sales round 4.80 was this panic situation in my opinion.

I would not be wondered if the same directors start collecting at 4.80-5 levels again and make this run to 6 soon

Gaja · 3 Re: Why directors selling FLCH Sat Jun 11, 2011 7:14 am

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http://print.dailymirror.lk/business/127-local/46592.html

Meta Trader · 4 Re: Why directors selling FLCH Sat Jun 11, 2011 8:30 am

Meta Trader

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Gaja wrote:http://print.dailymirror.lk/business/127-local/46592.html

Prominent investors sell Free Lanka stake
Saturday, 11 June 2011 00:00

Taprobane Holdings Chairman Ajith Devasurendra who is also a Director of Free Lanka Capital Holdings had sold 3.81 million shares of Free Lanka Capital Holdings (FLCH) at Rs.4.9 per share on June 9, a stock exchange filing said. However financial of FLCH as at 31 March 2011 outlines that Ajith Devasurendra had 12 million shares (0.88%) of FLCH.

Meanwhile another filling said that Ishara Nanayakkara who is also a Director of FLCH had sold nearly 38.9 million shares of FLCH on June 7. Subsequently, the filling by FLCH said Nanayakkara had sold in several trades including 3.5 million shares at Rs.5, 7.12 million shares at Rs.5.20, 16 million shares at Rs.5, 8 million at Rs.5.10, 4.2 million at Rs.5.20 and 67,300 shares at Rs.5.30 per share.

As per financials, till 31 March 2011, Ishara Nanayakkara led Lanka ORIX Leasing Co. PLC had 32.25 million of FLCH (2.36% stake) with Ishara Nanayakkara having 10.63 million shares (0.7% stake) of Free Lanka Capital Holdings.

Free Lanka Capital Holdings listed 1.368 billion shares on Colombo Stock exchange’s ‘Diri Savi Board’ on April 18 this year and it offered 300 million shares to the public at Rs.5 per share prior to listing.

Leo_pold · 5 Re: Why directors selling FLCH Sat Jun 11, 2011 12:32 pm

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I have bought some FLCH at 5 and since then it moved down to 4.80. There's definitely some panic selling with this and the directors sold their shares to make it happen. Soon the tide may turn and don't be surprised to see it reaching 10 within a matter of hours.

Please don't take this as a recommendation or promotion as I have clearly mentioned I have so much FLCH on my portfolio. (In fact half of my portfolio is FLCH now as I sold PAP and EAST and invest that on this)

Let's keep our fingers crossed. I think the coming weeks are for FLCH..

kam2011 · 6 Re: Why directors selling FLCH Sat Jun 11, 2011 1:19 pm

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cOrE wrote:Does anyone know as to why the directors are dumping such large quantities of FLCH shares at the lowest price..?
Will this bring the price even further..?
I do not believe in rallies though....
but previous articles on this page had said that there is going to be a rally soon...
this counter seems very ironic to me presently...

All those directors are connected with BROWNS. I feel they are expecting to buy Share of Browns Investment and therefore they sell Free lanka shares.And also may be they applied for Free lanka shares just to show higher demand since their IPO was announced in a bad time. Free lanka itseslf also has connection with BROWNS and I feel through their sister companies they have sufficient quantity of equity, . The IPO of BI will be annonced very soon.

StocksWatch · 7 Re: Why directors selling FLCH Sat Jun 11, 2011 3:17 pm

StocksWatch

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kam2011 wrote:

cOrE wrote:Does anyone know as to why the directors are dumping such large quantities of FLCH shares at the lowest price..?
Will this bring the price even further..?
I do not believe in rallies though....
but previous articles on this page had said that there is going to be a rally soon...
this counter seems very ironic to me presently...

All those directors are connected with BROWNS. I feel they are expecting to buy Share of Browns Investment and therefore they sell Free lanka shares.And also may be they applied for Free lanka shares just to show higher demand since their IPO was announced in a bad time. Free lanka itseslf also has connection with BROWNS and I feel through their sister companies they have sufficient quantity of equity, . The IPO of BI will be annonced very soon.

Yes that makes sense kam2011, but why did they have to wait till this hit the bottom to sell their stake?

P.S. This may not be the bottom, we never know but recently this bounced back after hitting 4.80, do not take this as buy/sell/hold recommendation.

kam2011 · 8 Re: Why directors selling FLCH Sat Jun 11, 2011 4:10 pm

kam2011

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Dear StocksWatch, May be they decided to hold shares till damand is created by the market conditions.. People started buying FLCH shares after March financial reports were published. That was also slowly started and during the last two weeks demand was gradualy increased. If they started selling earlier price could have been dropped drasticaly.Anyway I do not see any risk in entering this counter at this level(4.80/4.90).I give below some figures from their march 31 financials to enrich my view.

No. of shares issued = 1,368,000.000
Net Asset Value = Rs. 4,61
Pofit Before Tax = Rs. 1,374,000,000
Profit After Tax = Rs. 1,270,000,000
EPS = Rs. 0.46
(calculation of EPS is complicated to me. It should be higher than this. May be due to minority interest)

Segment profits as follows;

Tea = Rs. 253.2 mln
Rubber = Rs. 998.5 mln
Hydropower = Rs. 91.4 mln
Other = Rs. 38.0 mln

Major shareholders;

Free Lnka Capital(pvt) ltd. = 54.65%
Browns Invetment = 3.21%
Perpetul = 3.21%
LOLC = 2.36%

This is not a buy/sell recomondation. just to share information.

cse.alpha · 9 Re: Why directors selling FLCH Sat Jun 11, 2011 4:41 pm

cse.alpha

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Yes, curious transaction.

Generally, Director's BUY of own company share is stronger signal than Director's SELL of own company share - common sense says Director will BUY only if convinced of company future, whereas SELL could happen for many reasons, not always connected to company performance.

Deceitful manipulation by Director is not considered above.

But now 3 Directors of FLCH have disclosed sales in June - M.Prakash (1.2 million), A.Devasurendra (3.8 m) and I.Nanayakkara (38.9 m). Most of these shares were bought at Rs 4.7 on 30th December 2010 just before IPO (see page 41 of FLCH prospectus), probably at private placement time.

The Browns, Free Lanka, Perpetual, LOLC consortium still firmly controls FLCH (at cost of Rs.1 per share), and these sales are no doubt relatively small to the Directors concerned, but the timing of the sales is still a bit disturbing.

Another point is that I.Nanayakkara had only 10.6 m shares of FLCH @ 5th May 2011 - see shareholder list recently updated to FLCH 4Q interim result. Did he not disclose the purchases that enabled him to then sell 38.9 m shares, or were these shares sold from the LOLC account?

smallville · 10 Re: Why directors selling FLCH Sat Jun 11, 2011 6:35 pm

smallville

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cse.alpha wrote:Yes, curious transaction.
Another point is that I.Nanayakkara had only 10.6 m shares of FLCH @ 5th May 2011 - see shareholder list recently updated to FLCH 4Q interim result. Did he not disclose the purchases that enabled him to then sell 38.9 m shares, or were these shares sold from the LOLC account?

I think its I.N + LOLC... may be they've seen some good prospects in investing on Browns Investment due to the fame of Browns itself..