Captains reduce exposure to JKH

• Shareholding down 21% to 18% between September and December quarters
• Divests near 1% yesterday for Rs. 1.2 b; Current holding likely to 15%; Shifts focus to banking stocks, on the buying side of Commercial Bank yesterday
• More foreigners buy in to JKH
• Harry J’s Melstacorp with 3.2% stake is sixth largest; EPF’s third place intactJKH’s single largest shareholder, the Captains family, is reducing their exposure to the premier blue chip, booking profits and perhaps looking for other investments.

Captains yesterday sold a near 1% stake or over 7 million shares at Rs. 167 each in a deal worth Rs. 1.2 billion. Buyers included several foreign funds. As of yesterday foreign holding in JKH was near 40% or 333.5 million shares, up from 324 million shares end of 2011.

The family and connected parties have been selling down at JKH a bit more aggressively of late.
In comparison to 21% collective stake in JKH as of September, the holding had come down to 18% officially by December 2011. Captains current shareholding in JKH couldn't be confirmed but judging by recent sales it is likely to be around 15%.
However given the fact that Captains heavily trade on the Colombo Bourse to book profit or realign and re-allocate investment portfolio (as evident by shift to banking stocks with attractive PERs) analysts didn’t rule out them returning to the buying side of JKH.
As per JKH’s third quarter interim accounts released yesterday, the holding of S.E. Captain had been reduced to 13.7% (115.6 million shares) in JKH as at 31 December 2011, from 16% as at September quarter, while L.A. Captain’s stake has come down to 6.79 million shares or 0.8% from 9.9 million shares.
Despite the shedding of individual stakes, related party Paints and General Industries had marginally increased its stake from 8% to 8.3% or 70 million JKH shares.
Since late last year as well as in the New Year, the Captains have increased focus on the banking sector stocks. Yesterday Captains collected bulk of 3.7 million shares of Commercial Bank at Rs. 100 each along with a few other high networth investors. Buying into Commercial Bank had gathered pace since December picking up a few of the big blocks held by foreign funds. They also own as of September 2011 around a 3.54% stake in HNB.
At JKH, foreign investor Janus Overseas Fund has retained its 10.3% stake thereby remaining the second largest, followed by EPF owning 8.3%, marginally up from 8% as of September. Harry Jayawardena’s Melstacorp was holding a 3.2% stake in JKH, thereby becoming the sixth largest shareholder, up from 2.3% in September.