Colombo stocks slide on negative judgment on JKH

John Keells Holdings’ (JKH) stocks slumped on Tuesday when trading opened in the Colombo bourse on the back of yesterday’s Supreme Court judgement of 2002 privatisation of Lanka Marine Services (LMS).

There was anticipation of a similar (judgement) outcome in the dispute over the Sri Lanka Insurance Corporation (SLIC) privatisation also being contested in the Supreme Court, which could negatively impact on SLIC subsidiary Distilleries Corporation shares.

“The LMS ruling has affected the JKH share badly. We will continue to see this throughout the day,” Srimal Liyanage, Head of Research at Lanka Securities said. He said the Distilleries share price could also see rapid slides during the day as a similar outcome is expected by investors on its parent company SLIC by the Supreme Court. On Monday, Supreme Court Chief Justice Sarath N. Silva with two other judges agreeing, declared that the 2002 privatisation of LMS was illegal, unlawful and arbitrary. LMS is a fully owned subsidiary of the JKH group.

Brokers said the index heavy JKH share price dropped in early trades by Rs.8 to Rs. 95 and was expected to further slip thereby negatively affecting the indices. The All Share Index lost 31.81 points to stand at 2,359.65 while the Milanka dropped by 38.23 points to stand at 2,813.46 in early trades. Total turnover stood at Rs.87 million.