Ceylon Tourism Fund to Benefit by Sector Boom. Banking & Tourism to Top Colombo Stock Exchange in 2011

21st January 2011, www.dailynews.lk, By Ramani Kangaraarachchi

The tourism and banking sectors will outperform the rest in the Colombo stock market this year. The first ever Ceylon Tourism Fund of Ceylon Asset Management (CAM) will enable Sri Lankans to cash in on the tourism boom to explore emerging opportunities, (CAM) Managing Director Dulindra Fernando told Daily News Business.

He said the tourism and banking sectors will outperform the market in 2011 and this will be the turnaround year for Sri Lanka from being a developing economy to an emerging economy.

The country has already joined the high growth club in the Asian region and as a result the Colombo Stock Exchange (CSE) will again be a top performer in the region,” he said.

Fernando said the tourism sector is at the beginning of a long growth curve but the number of hotel rooms is very small as 14,500 could cater to less than 600,000 tourists per annum. “Therefore the prices of rooms are likely to increase. This is because the country has utilised only two provinces namely Western and Southern. Seven other provinces are yet to be utilized,” he said.

He said the Ceylon Tourism Fund (CTF) of CAM covers around 55 percent of the sector market capitalization and over 80 percent of the five star rooms in Sri Lanka.

The total Unit Trust Industry investors as at December 31, 2010 was only 24,600 and CTF investors in four months stands at 450 which is a very positive outcome.

The company focuses on small investors with a minimum of Rs 10,000 to enjoy higher returns that are available in the CSE.

He said Sri Lanka has brought tight credit control on stock brokers in October and the market is coming down towards good credit. Therefore Sri Lanka is not a high risk market anymore and it has matured over the last two years.

Elaborating on the opportunities Fernando said the demand for Sri Lanka is growing rapidly in two segments.

The Asian traveller is a new market consisting high end Indians and Arabs. The other one is the Western traveller seeking beautiful beaches. Therefore CAM expects to bring the opportunity to the mass market.

The CAM will approach Tamil and Sinhala speaking masses towards their objective and the challenge is making awareness among them which is very low.

Related Info :
• Sri Lanka’s Ceylon Tourism Fund by CAM with Deutsche Bank to Invest 0.5bn in 10 Key Leisure Companies
• Ceylon Financial Sector Fund Invests in Banking & Insurance Sector which Outperformed Share Market in Sri Lanka

Ceylon Financial Sector Fund Invests in Banking & Insurance Sector which Outperformed Share Market in Sri Lanka

30th October 2010, www.lankabusinessonline.com

A new Sri Lankan investment fund that opened for subscription Friday is targeting the banking sector which is seen doing well given the need for funding to fuel an economic boom, officials said.

Deutsche Bank and Ceylon Asset Management (CAM) Company have set up the Ceylon Financial Sector Fund to invest in banking, finance and insurance companies which have outperformed the share market this year.

The sector is forecast to grow strongly given accelerating economic growth after the end of the island's 30-year ethnic war in May 2009, officials said.

Fund units are offered at 10 rupees each with a minimum investment of 10,000 rupees.

"The banking sector has outperformed the All Share Price Index," Dulindra Fernando, managing director of CAM told a news conference.

"We've created this fund that enables investors to capture part of this booming industry. It is an open-ended fund, fully tax exempt and money can be withdrawn anytime."

CAM Company is a joint venture between Sri Lanka Insurance Corporation which has a 25 percent stake and Ceylon Capital Trust which has 75 percent.

The fund will minimise risk by eliminating speculative trading and daily valuations and the fund's portfolio content will be disclosed on the company website daily.

The 10 companies the fund will initially invest in are Commercial Bank, Hatton National Bank, Lanka Orix Leasing Company, DFCC Bank, Sampath Bank, National Development Bank, Nations Trust Bank, Central Finance, Seylan Bank and Aviva NDB Insurance.

The fund's maximum exposure limit to one company is 15 percent.

"The sector is in very good shape particularly with non-performing loans in the range of five percent with the exception of Seylan Bank," Fernando said.

"In current economic scenario we see banking sector growth being driven by low interest rates,, excess liquidity in the financial sector and hopefully a VAT (value added tax) reduction for the financial sector in the next budget," he said.

"We expect many new projects to need financing in the fast growing sectors of the economy."

Related Info:
Sri Lanka’s Ceylon Tourism Fund by CAM with Deutsche Bank to Invest 0.5bn in 10 Key Leisure Companies

Sri Lanka’s Ceylon Tourism Fund by CAM with Deutsche Bank to Invest 0.5bn in 10 Key Leisure Companies

01st August 2010, www.thebottomline.lk, By Santhush Fernando

Ceylon Tourism Fund - Sri Lanka’s first ever sector fund launched by the ambitious Ceylon Asset Management is hopeful of raising a half a bn rupees. “We anticipate to raise about 500 mn rupees within the next three months, out of which a 200 million has already been committed by investors,” said Dulindra Fernando, the Managing Director of Ceylon Asset Management, the only index fund manger in Sri Lanka.

Ceylon Asset Management (CAM) in partnership with Deutsche Bank AG to introduce the Ceylon Tourism Fund, to capture returns from the Top 10 tourism companies listed on the Colombo Stock Exchange (CSE). lt is the first ever tourism sector fund, structured as an open-ended, equity fund that lets investors invest and exit at any time. The Fund will distribute tax-free income from profits on an annual basis. It captures over 70% market capitalisation of the Hotel and Tourism sector of the CSE, including both Colombo hotels as well as resorts.

The tourism sector which first blossomed in the late seventies was one of the worst affected sectors that have struggled since 1983. It will also be the greatest beneficiary of “peace” where Sri Lanka can open itself to the travel world in its true magnificence for the first time. It is probably the Industry that will lead to Sri Lanka’s economic recovery, in the midst of the Global Financial Crisis.

New York Times has rated Sri Lanka as the No.1 tourist destination in the world to visit while National Geographic rated Sri Lanka the 2nd best island destination in the world to visit after Cuba. Tourism arrivals have doubled from the Middle East during the year 2010 while tourists from India have increased 78.4%. The total number of tourists between the January and June 2010 has increased nearly 50%. Colombo hotels have experienced a surge of guests from India, in the form of corporate sales conferences and weddings etc. The recent reduction in import duties and the IIFA publicity in India are expected to position Sri Lanka to emerge as a regional shopping hub to promote Tourism, along the lines of Singapore and Dubai. The Ceylon Tourist Board expects more than 575,000 tourist arrivals during 2010 alone. The year 2011 is the Visit Sri Lanka year.

Sri Lanka’s key constraints are the limited 14,500 rooms and the infrastructure, both of which are the focus areas of policy makers today. Most hotels are rapidly refurbishing and expanding, while many investors are getting into position with acquisitions and mergers. The sector has outperformed the market (ASP) in 2009 as well as 2010 as it bounces back as the leading sector on the CSE.

The Ceylon Tourism Fund invests in ten key companies in the Hotels and Travel Sector. The companies are Aitken Spence Hotels, John Keells Hotels, Asian Hotel & Properties, Taj Lanka Hotels, Ceylon Hotels Corporation, Hotel Services (Ceylon), Royal Palm Beach Hotels, Amaya Leisure (former Connaisance), Light House Hotel (managed by Jetwing), The Fortress Resort PLC etc. The Top 10 tourism companies posses the management skills, service standards, marketing relationships and the capital to leverage profits and expand market share in the near term.

On July 28, 2010, the Units will be offered at the IPO price of Rs. 10 with a minimum investment of Rs. 10,000. Deutsche Bank, a leading global bank, is the Trustee and Custodian of the fund. Ceylon Tourism Fund is licensed by the Securities and Exchange Commission of Sri Lanka. Unit trusts are tax-free vehicles regulated by the SEC to protect the interests of investors. Unit Trusts, also known as Mutual Funds enable investors to gain expert fund management and enjoy a diversified portfolio, regardless of the size of investment. Open-ended Unit Trusts enable investors to exit at any time with a bank cheque in their favour issued within 3 days.

Ceylon Asset Management has a 10 year track record in index fund management to offer stock market returns without speculative or trading risks. CAM also manages two other funds namely the Ceylon Index Fund and the Ceylon Income Fund. CAM is an associate company of Sri Lanka Insurance Corporation.