National Equity Fund of NAMAL Pays Dividends for a Record 20 Years

03rd April 2013, www.island.lk

National Asset Management Limited (NAMAL), maintaining its continuous dividend payments, announced that the company’s flagship fund the National Equity Fund (NEF) paid a dividend of one rupee per unit to the Unit holders for the year ended 31st March 2013. NEF is the only Equity Fund to have made continuous dividend payments since its inception including the exigent times in the industry, NAMAL said in a statement.

Avancka Herat, Executive Director and Chief Investment Officer of NAMAL, stated that the fund outperformed the CSE All Share Price Index (ASPI) on an YTD, 12 months & 24 months by 5.51%, 9.44% and 17.99% and attributed this superior performance to timely asset allocation.
He further stated that the NEF which is classified as a Balanced Fund, was the best performing fund in its respective segment. The fund also achieved a CAGR of 14.71% on a dividend re investment basis since inception in December1991 to 28th February 2013. NEF was launched in 1991 and currently has Rs. 1.7 billion assets under management with annual dividend payouts being made at a historical average of Rs. 1.22 during the 20 year period.

"NAMAL is Sri Lanka’s first unit trust management company, having commenced operations in 1991, with a 20-year track record of successfully investing in the Sri Lankan equity and debt markets. NAMAL currently operates eight unit trusts including the flagship National Equity Fund and the only listed unit trust. Principal shareholders of NAMAL are Union Bank of Colombo PLC and DFCC Bank PLC."

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Sri Lanka's Heraymila Capital Launches an Equity Fund. Heraymila Capital Growth Fund will Invest Primarily in Listed Sri Lankan Equities

18th January 2012, www.lankabusinessonline.com

Sri Lanka's Heraymila Capital (Pvt) Ltd, a unit of Dubai-based Herayamila Investments Limited has launched an equity fund offering 500 million units at 10 rupees each.

The open-ended fund will sell units at the offer price until January 31 and at market value thereafter.

Heraymila Capital Growth Fund, will invest primarily in listed Sri Lankan equities as the island is poised to grow after ending a 30-year war.

"Key sectors such as construction, manufacturing, retail , tourism and financial services are poised to benefit from post war investment, infrastructure development, higher disposable incomes, and better destination ratings," the firm said.

Last year Sri Lanka grew at 8.3 percent though officials are expecting slightly lower growth this year.

Sri Lanka's stocks rose for two years after the end of a 30-year war peaking in February 2011 at price to earnings multiple of 29.5 times.

The market has since been re-priced at 15.3 times.

"The launch of the fund is therefore timely and well positioned to take advantage of the post war expansion taking place in Sri Lanka," the firm said.

Though targeting 5.0 billion Rupees (44 million US Dollars) it will start operations with a billion Rupee seed capital.

"Investors will benefit from Heraymila Investment Limited's risk management processes, investment processes and vast experience in investing in other similar markets," the company said.

"Furthermore, HCL has employed portfolio managers with many years of experience in Sri Lankan capital markets and in managing unit trust funds. The trustee and custodian of the fund will be Deutsche Bank, Colombo."

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NAMAL Unit Trust Management Company Launches IPO Fund to Capture Potential Upside and to Benefit from Preferential Allocation of 10pct

27th July 2011, print.dailymirror.lk

National Asset Management Ltd (NAMAL), the pioneer Unit Trust Management Company in Sri Lanka announced the launch of the NAMAL IPO Fund. The Fund has been launched to capture potential upside on mispriced IPOs (initial public offerings) as well as to benefit from the preferential allocation of 10% of the offered shares to the Unit Trust Investor Category.

The fund will invest at the IPO offering stage and in post-IPO securities for a period of one year.

The Fund is targeted at retail investors with a minimum investment of Rs. 10,000 and will enable retail investors to obtain a meaningful allocation without the hassle of applying for each individual IPO and obtaining bank guarantees.

Avancka Herat, Executive Director of NAMAL, stated that “Retail investors have faced a significant challenge in evaluating IPOs in recent times.

With many IPOs in the pipeline in the next few years, Investors in the Fund will benefit from the professional selection of IPO securities and portfolio management by NAMAL’s experienced fund management team”.

Unique features of the NAMAL IPO Fund are that it would invest in the post-IPO stage and in other equities in the market if the managers think that IPOs are not properly valued thus ensuring equity exposure for investors. The NAMAL IPO Fund will not charge an exit fee to investors even if they redeem within a short period of the initial investment. The NAMAL IPO Fund is licensed by the Securities & Exchange Commission of Sri Lanka as an open-ended Unit Trust.

Charana Jayasuriya, Head - Sales & Structuring stated that “NAMAL IPO Fund joins the portfolio of open-ended unit trusts managed by NAMAL with different markets strategies and risk return objectives. NAMAL will continue to launch new opened ended funds to increase the range of individual investment options.”

Established in 1991, as the first Unit Trust Management Company in Sri Lanka, NAMAL has a 20-year track record of successfully investing in the Sri Lankan equity and debt markets. The flagship National Equity Fund has generated 16.9% annualised return for the last 19 years. NAMAL operates eight Unit Trusts including NAMAL Acuity Value Fund, the only listed Unit Trust, and the NAMAL Amana Fund, the only Shari’ah compliant Unit Trust.

In February 2011, Union Bank of Colombo PLC purchased 51% of NAMAL with Ennid Capital (Pvt) Ltd, an investment arm of Singapore based BP De Silva Holdings purchasing 19%. With founding shareholder DFCC Bank retaining a 30% shareholding, NAMAL is backed by the financial strength and stability of two of the leading banks in Sri Lanka. S Jeyavarman, CEO, stated that NAMAL Unit Trusts are now available from all Union Bank branches, as part of the strategy to offer new investment products to suburban and rural investors.

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First Ever IPO Fund in Sri Lanka Launched by Ceylon Asset Management

22nd June 2011, www.dailynews.lk, By Sanjeevi Jayasuriya

The country's first ever IPO fund was launched yesterday with focus to broadbase investor strength especially regarding retail investors. The Fund will invest only in IPOs in Sri Lanka providing an opportunity for the retail investors to increase their share purchasing powers at IPOs.

We do not invest in the stock market and the investors are guaranteed a fixed return on their investment, Ceylon Asset Management Managing Director Dulindra Fernando told the Daily News Business.

“Asia has a fast growing IPO market with two third growth coming from this region. The IPO companies represent new Sri Lanka and there will be an IPO boom in the country in the next five years,” he said.

The lull period in the Sri Lankan IPO market for the past decade due to war is now having an upward movement and there are a large number of IPOs in the pipeline.

“These companies secure funds to expand in the fast growing sectors in the Sri Lankan economy and markets. This will fuel the golden era of fast GDP growth, ” Fernando said.

The fund will offer direct exclusive opportunity for retail investors where its returns will not be subject to the volatility in the stock market. A special promotional offer of Rs 1,000 investment will be there to encourage the retail investors where the Units are offered at Rs 10 each.

Ceylon Asset Management (CAM) and Deutsche Bank AG have joined hands to launch the IPO Fund to exploit an opportunity created by the Security Exchange Commission of Sri Lanka (SEC).

The SEC has passed legislation that reserve 10 percent of each IPO for eligible Unit Trusts.

The tax-exempted Unit Trust is designed to safeguard capital investors while generating tax-free interest income by investing all excess cash in short term fixed income instruments.

The Fund will accept investments upto a maximum of Rs 10 million where several high profile IPOs are expected during this year.

Related Info :

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• IPOs on CSE Must Allocate 40pct Shares to Retail Investors, Sri Lanka's Markets Regulator Decides. 10pct Offer to be Made to Unit Trust Funds

• Sri Lanka Unit Trusts Attract Rs1.5bn New Funds in First Ten Months of 2010

Japanese Fund Management Company in Sri Lanka to Examine Investment Opportunities to Set up Sri Lanka IPO Fund by June 2011

29th May 2011, www.sundaytimes.lk, By Duruthu Edirimuni Chandrasekera

A Japanese fund management company, VEC Investment (Value Ethics Contraction) visiting Sri Lanka this week to examine investment opportunities said that they are setting their sights on forming an initial public offering (IPO) ‘fund’ dedicated to Sri Lanka in a bid to lure Japanese investors into investing in local equities market in addition to listed firms in the Colombo Stock Exchange (CSE).

“We’ll set up a ‘Sri Lanka IPO fund’ by June and we want to facilitate Japanese firms or investors to come into the Sri Lankan share market through this,” Toshiaki Tanaka, President VEC told the Business Times.

He was part of the Tokyo AIM (TAIM) team which is also gauging the potential in the CSE. The team, whose visit was facilitated by local broker New World Securities (NWS), met up with regulators and top corporates.

Mr. Tanaka also said that his company is keen to draw Japanese investor attention to local private placements (PPs) along with the IPOs. “We are preparing to invest in PPs as well and currently we are in discussion with some corporates with regards to PPs,” he added.

Yuki Uchiyama, Corporate Officer, IT Solution VEC, whose specialty is assisting asset management for Japanese IT firms noted that they will bring in many Japanese IT companies to list in the CSE, which will be facilitated by NWS. “Right now the Japanese market is saturated and we want Japanese IT firms to raise money from emerging markets such as Sri Lanka,” he explained. He said the CSE is attractive and also promising for raising capital and this visit has put a positive spin for such business.

Kazunao Sato, Executive Director VEC revealed that they are targeting to invest in logistics such as cold storage business at the Hambantota Port. He added that temperature-controlled warehouse logistic firms from Japan are interested in setting up a logistics plant for refrigeration, storage, etc. “We are also extremely keen to explore tourism and the telco sectors,” he said, explaining that acquisitions, mergers and joint ventures are being discussed pertaining to such investments. He added that currently a similar partnership is being explored through VEC by a Japanese firm for an investment opportunity in a local travel firm.

Mr. Tanaka added that by early next month a high powered investment team is due in the island as a result of the contacts this delegation made along with NWS during the 3-day visit. “Some top officials in major share broking houses, asset management companies will come in to Sri Lanka in two week’s time to discuss business opportunities,” he said.

Yutaka Ito, COO, TAIM joining in the discussion told the Business Times that Sri Lanka’s GDP rate is ‘fantastic’. “Our main mission is to introduce Tokyo Stock Exchange’s (TSE) equity and bond markets to the Sri Lankan investors. TAIM is a good path to raise money for firms in Sri Lanka,” he explained.

He said that listing in Tokyo AIM helps firms to grow their business through access to a wider layer of funding options and an easier way to bring in fresh capital into firms. Mr. Ito explained that TAIM discussed local firms’ listing in Tokyo AIM. He noted that there’re no minimum requirements for market capitalisation or free float for a company to list on Tokyo AIM.

The listing company structure can be arranged on a case-by-case basis. Mr. Ito added that TAIM wants to facilitate Japanese bond investors here through a fixed income market called T-Pro Bond. He also noted that the CSE is not over valued, but foreign participation is important to expand the CSE.

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Sri Lanka Acuity Partners & Ceylon Guardian Investment Trust to Set up a Firm to Run Mutual Funds

22nd May 2011, www.lankabusinessonline.com

Sri Lanka's Acuity Partners, an investment bank, and Ceylon Guardian Investment Trust is setting up a joint venture firm to run mutual funds (unit trusts), targeting domestic and international markets.

The new firm called Guardian Acuity Asset Management, will launch funds which will invest in equity and fixed income, Guardian said in a statement.

Acuity Partners is a joint venture between Sri Lanka's Hatton National Bank and DFCC Bank. Ceylon ¬Guardian Investment Trust is part of the listed Carsons Cumberbatch group which manages 33 billion rupees including a Sri Lanka country fund based overseas.

"The post war economic development in Sri Lanka will see increasing per capita income and savings rates amongst the people which would translate to a demand of a wide variety of savings and investment options…," the firm said in a statement.

The firm said it wanted to structure investment products to match different risk and return profiles of savers.

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Union Bank Plans a Country Fund through NAMAL. Possibility of Listing is Singapore Explored

13th February 2011, www.sundaytimes.lk

Union Bank Ltd (UBL), which scored a double whammy this week by announcing its intention to go public by March end while acquiring a majority stake in Distilleries Company subsidiary, National Asset Management Ltd (NAMAL) is planning a country fund, UBL officials said.

“We will be creating a country fund for Sri Lanka and other emerging markets through NAMAL,” Alex Lovell, Deputy Chairman UBL and a high networth investor told the Business Times on the sidelines of UBL’s Initial Public Offering launch.

He added that NAMAL will shortly apply for regulatory sanctions pertaining to this fund. He said that the fund is still being structured and that they might explore twin listings here and abroad.

“We are exploring the possibility of listing this fund in a stable, highly regulated and a safe place such as Singapore,” he said. Distilleries subsidiary, Milford Holdings Pvt Ltd is selling a 70 % majority stake in pioneering unit trust firm, NAMAL for nearly Rs 455 million to two parties - UBL and Ennid Capital, the company in a statement said on Thursday.

It said a share sale agreement for UBL to purchase 51%, while Ennid Capital Pvt Ltd will buy 19% in NAMAL. Ennid Capital is Sri Lankan Jeweller, B.P. de Silva’s investment arm.

UBL IPO is slated to raise Rs. 375 million. The bank is offering 15 million shares at Rs. 25 in three categories of 1.5 million for employees, 2.25 million for customers that have maintained accounts for a minimum of 6 months as at 31 January 2011 and 11.25 million shares for investors.

Through this IPO UBL plans to carry out branch expansion and mobilisation of low cost funds, expand while leveraging of e-channels, focus on priority sectors in the economy for credit, and carry out trade financing, expand their capital market operationsand share trading, introduce banking for the bottom of the pyramid (bare-foot banking), implementation of a core banking system to increase efficiency and resource utilization and risk management system for prudent credit pricing and monitoring and focused recoveries.

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Sri Lanka's Richard Pieris Securities Talks to Foreign Funds to Attract Investment to CSE

07th February 2011, www.lankabusinessonline.com

Sri Lanka's Richard Pieris Securities is in talks with big foreign funds to attract more investments to the Colombo bourse and plans a separate unit to lend money for trading, an official said.

The firm, a subsidiary of the Richard Pieris & Co group, has just got its stock broking license from the regulator, the newest broker in Colombo's booming bourse.

Richard Pieris Securities chief executive Jayantha Perera said more foreign funds were needed in the market which is now dominated by retail traders.

"Now the market is driven mostly by retailers," he said in an interview with Lanka Business Report, our sister news television show and website, at the official launch of the company.

"We need to get more foreign funds, big ticket players in the international arena, to come to Sri Lanka.

"We've already spoken to three funds from three different countries."

Colombo's small bourse was Asia's second-best performing stock market last year and is also one of the best-performing so far this year.

The market began a bull run soon after the island's 30-year ethnic war ended in May 2009 with corporate earnings and economic growth increasingly sharply.

Perera also said a new subsidiary will be set up under the Richard Pieris group to lend money to retail traders in the stock market as stock brokers themselves are not allowed to do so.

"We're going to set up separate sister company, Richard Pieris Financial Services, to provide margin trading facilities for clients, to support day traders."

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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.

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Guardian Fund Bets on Sri Lanka Banks, Retail, Leisure & Construction Sector Stocks

20th January 2011, www.bloomberg.com

Guardian Fund Management Ltd., which oversees Sri Lanka’s largest listed investment trust, is betting on bank, retail, leisure and construction stocks on optimism the end of the island’s 26-year civil war will bolster economic growth and corporate profits.

The Colombo All-Share Index has more than tripled since the war ended in May 2009 as the economy’s recovery spurred a near 10-fold increase in daily trading volumes. The gauge rose 96 percent last year, the second-biggest gainer among 90 global indexes tracked by Bloomberg after Mongolia’s MSE Top 20 Index. Companies on the Sri Lankan measure are valued at a price earnings multiple of 22.6 times, Asia’s second-most expensive after New Zealand’s NZX 50 Index.

“With real economic growth rates expected to be in the 8 percent range, the whole range of economic activity would be driven by the financial services sector,” said Guardian Chief Executive Officer Ruvini Fernando. Corporate earnings “should show significant improvement, particularly in the tourism and construction sectors, as well as in sectors related to consumer spending like retail and consumer durables,” Fernando said.

The Central Bank of Sri Lanka Governor Ajith Nivard Cabraal said this month the bank is aiming to accelerate growth in the island’s $42 billion economy to 8.5 percent in 2011 and 9 percent in 2012 from an 8 percent expansion in 2010. The monetary authority cut a key interest rate on Jan. 11 for the third time in seven months to help spur economic growth.

Guardian’s $330 million equity investment trust portfolio gained 128 percent in the nine months ended Dec. 31, compared with a 77 percent rise in the All-Share. Colombo-based Guardian is part of Sri Lankan diversified company Carson Cumberbatch & Co., which has interests in breweries, real estate and oil palm plantations, among others.

Rains, Floods

Guardian doesn’t favor stocks “subject to volatility” such as Sri Lankan plantation companies, which are sensitive to weather, commodity prices and wage increases, Ruvini wrote in a e-mailed reply to questions. She said recent flooding in the country hasn’t spurred any change in her investment stance.

Heavy rains caused floods in the north and east of the island nation, destroying rice and vegetable crops, displacing about a million people and killing 38, according to government estimates. Sri Lanka’s floods won’t prompt the central bank to change interest rates, Cabraal said Jan. 18, pointing to adequate rice stocks that can check any spurt in food prices.

Telecommunications stocks are also less attractive due to the “high level of penetration and intense industry competition,” she said.

John Keells Holdings Plc, Aitken Spence Hotel Holdings Plc., Commercial Bank of Ceylon Plc, Cargills Ceylon Plc and Royal Ceramics Lanka Plc are among Guardian’s top holdings in its U.S. dollar-denominated Sri Lanka Fund.

Shares of Keells rose 67 percent in 2010, while Aitken Spence Hotels advanced 177 percent. Sri Lanka Telecom Plc, the island’s biggest fixed-line phone company, lagged behind with a 9 percent climb.

To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net

To contact the editors responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net; Darren Boey at dboey@bloomberg.net

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Sri Lanka Equity Fund Relaunches for Foreign Investments Seeking Better Returns in Frontier Markets

08th December 2010, www.lankabusinessonline.com

Carsons group wants to lure foreign investors seeking higher returns to invest in post-war Sri Lanka by re-launching a country fund it manages that will put money in high-growth stocks, officials said. The Sri Lanka Fund is an open-ended mutual fund that will also target Sri Lankans living overseas who want to invest in listed firms which are expanding after the end of the island's 30-year ethnic war in May 2009.

Minimum investment in the Sri Lanka Fund, incorporated in the Cayman Islands and registered with the Singapore Monetary Authority, would be 50,000 US dollars, said Ruvini Fernando, director of Guardian Fund Management, which manages the fund.

Guardian manages over 300 million US dollars of assets of the investment companies of Carson Cumberbatch, a diversified group with interests in oil palm plantations, brewing and real estate in south and south east Asia.

"Now, with the peace dividend, we feel the time is right to revive the fund and grow it," Carsons director Mano Selvanathan told a news conference.

"We're in a position now, with exchange controls being liberalised to attract more investments. Maybe Sri Lankans themselves could, with the new rules, invest in the Sri Lanka Fund through the Cayman Islands and reinvest back in Sri Lanka."

As promoters, Ceylon Guardian Investment Trust and Ceylon Investment have invested two million US dollars as seed capital in the Sri Lanka Fund "to give foreign investors confidence that the promoters are sharing the same risk they're sharing," Fernando said.

"Already, the two million dollars has grown by about 50 percent."

Post-war optimism and revived corporate earnings sent the Colombo bourse to record highs this year although the market has cooled somewhat after regulators imposed limits on trading with borrowed funds.

The economy is forecast to grow at eight percent this year amid a boom in tourism, rapid infrastructure construction and increased consumer spending.

"Western funds are not getting enough returns (in their own markets) and are looking for higher returns in frontier markets like Sri Lanka," said Chandima Gunawardena, director of Carsons.

Fernando said the Sri Lanka Fund's investment strategy would have a 3-5 year focus with money invested in high-growth sectors and firms with dynamic management and expansion plans expected to make immediate gains after the war.

"We will only invest in listed securities. Because this is an open-ended fund investors can come in and go out any time."

The five sectors in which the fund will initially invest in are banking, finance and insurance; diversified conglomerates; hotels and travel; manufacturing and beverage.

"Any economic development process starts with banks, with expansion in lending and funding activity. The hotel sector will gain from the tourism boom," Fernando said.

"In the diversified sector we will invest mainly in companies with exposure to tourism and infrastructure like John Keells Holdings and Aitken Spence. The beverage sector will gain from increased consumer spending and investment in manufacturing will be more oriented towards the construction industry."

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Sri Lanka Unit Trusts Attract Rs1.5bn New Funds in First Ten Months of 2010

Sri Lanka Unit Trusts Attract Rs1.5bn New Funds in First Ten Months of 2010

26th November 2010, www.news.lk, By Charumini De Silva

During the first ten months of this year the Unit Trust industry has attracted new funds over Rs 1.5 billion. The total funds under management are Rs 17 billion as at October 31 this year.

Speaking to Daily News Business Unit Trust Association of Sri Lanka (UTASL) Treasurer P Asokan said the industry was also able to collect around Rs 300 million every month during the past three months.

The growth funds recorded an average performance of 90 percent to 100 percent on year-to-date while the balance funds recorded 70 percent to 95 percent growth year-to-date.

The main advantage of this year’s budget to the Unit Trust industry was that the Government permitted direct foreign investments to any Unit Trust fund. Unit management companies will take up this opportunity and market their products overseas.

He said individual investors would be in a position to reap the benefits of the stock market through Unit Trusts. The Unit Trusts are professionally managed by fund managers and they have well diversified investment portfolios which provides a significant growth in the medium to long-term.

“Prior to the budget foreign investors were permitted to invest in growth funds provided they add a maximum investment restriction of 20 percent in Government securities. With the budget 2011 foreign investors can now invest in income funds, balance funds, growth funds and also index funds,” Asokan said.

He said with the interest rates expected to remain low, Unit Trusts provide an alternative investment for the investor to reap benefits of the returns available in the capital market.

“Therefore, we believe public will realize that they are dependent on interest rate would be futile.

It is good timing that the public should look for alternative investments to achieve a real rate of return. Thus, Unit Trusts could mobilize and attract these investors into the funds, which are managed by the professional fund managers,” he said.

“With Colombo Stock Exchange (CSE) performing well the Unit Trust industry has noticed that new investments are increasing especially in balance funds and growth funds. However with the slow interest rate regime there is a slow growth in the income funds,” Asokan said.

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Saudi Arabian Heraymila Investments of Al Mashal's Start a Fund to Invest in Listed Sri Lankan Companies

04th November 2010, www.bloomberg.com

Heraymila Investments Ltd., which manages Saudi Arabian entrepreneurAbdulaziz Al Mashal’s businesses, including private equity and real estate, will start a fund in Sri Lanka to benefit from the island’s growth.

Heraymila, based in Dubai, plans to raise at least 5 billion rupees ($45 million) for the fund that will invest in listed Sri Lankan companies. Faster economic growth with the end of Sri Lanka’s 26-year civil war in May 2009 is boosting company earnings and encouraging investments.

The fund, structured as a unit trust, will start raising money from investors in the Middle East and Asia by the middle of 2011, Ravi Abeysuriya, chief executive officer of Heraymila’s stock broking unit in Sri Lanka, said in Colombo today.

Heraymila, which manages $260 million in assets, will also set up a unit in Sri Lanka to channel private equity investment to the island, Abeysuriya said.

“The end of the civil war could add 2 percent to Sri Lanka’s growth each year,” said Shamubeel Eaqub, consultant economist for Heraymila Securities Ltd. “There are opportunities to invest in banks and construction firms. The consumer sector is a good long-term play given Sri Lanka’s burgeoning middle-class.”

The Colombo All-Share Index has doubled this year, making it the second-best performing index in the world behind the Mongolia Stock Exchange’s Top 20 index among benchmarks tracked by Bloomberg.

To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net.

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net

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Heraymila of Saudi Arabia's Al Mashal Group Invests in Sri Lanka

01st November 2010, www.lankabusinessonline.com

The Sri Lanka unit Heraymila Investments, a part of Saudi Arabia's Al Mashal group will use its global links to channel funds from the Middle East and elsewhere with a strong research backed strategy, the head of its local unit said.

"We will be offering opportunities for Sri Lankan companies to raise funds tapping the relationships we have with international funds," Ravi Abeysuriya, group chief executive of Heraymila's Sri Lankan operations said.

"Our main strength will be our placement capabilities."

Heraymila bought into a licensed stock brokerage, formerly controlled by Amana, a Colombo-based Islamic finance group.

But Heraymila is also setting up divisions to handle investment banking and fund management.

Heraymila has been investing in Sri Lanka's equity market from 2005, and bought strategic stakes in several firms, including a 10 percent stake in Commercial Bank at one time.

"When peace came they were keen to play a more active part in the market, because they felt there were a lot of opportunities to attract foreign funds, including their own money," Abeysuriya said.

In addition to around 260 million dollars it is directly managing, Abeysuriya says the group co-invests around the globe with international finance houses such as JP Morgan and Goldman Sachs.

One of its strengths will be a strong research capacity. Abeysuriya himself at one time headed the Sri Lanka unit of Amba Research, a capital markets research outsourcing firm catering to US and European markets.

"The core of our value proposition is fundamental research, where we will be publishing quarterly research on the macro-economic situation, sectoral analysis and selected coverage of individual companies," he said.

Heraymila will also get into fund management. Abeysuriya says the group will structure funds that will meet the appetite for mutual funds abroad.

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 NDB Aviva Investment Plan for Capital Security with Higher Returns from Stocks

12th October 2010, www.lankabusinessonline.com

Sri Lanka's largest fund management firm is selling an investment plan which allows cautious savers participate in a stock market upside but be protected from a steep fall by putting the bulk of the money in debt.

"If you are an investor who wants higher returns (because interest rates are low), the stock market could be an ideal option," says Praboda Samarasekara, head of NDB Aviva Wealth Management.

"But, stock market investments are risky which could not only wipe out an investor's returns but also his or her valuable capital."

"We are offering product where corporate debt will give enough returns to cover even a 50 percent fall in stock values."

The firm is offering an investment plan called Asai Bayai (Want to, but apprehensive) where money is split between its Eagle Growth and Investment Fund, which is in stocks and Eagle Income Fund which is in corporate debt.

A one year plan which is 10 percent invested in the stock market and 90 percent in debt would protect the capital even if the market fell 50 percent, as the 90 percent invested in corporate debt would give a return at least 5.0 percent in a worst case scenario, says Samarasekara.

At the moment Treasury bills are returning about 7.0 percent and good corporate debt about 9.0 percent.

"Effectively this means we have stress tested the plan for a steep fall in both stocks and interest rates, where an investor would still come out with their capital intact," says Samarasekera.

"If either or both does not happen you will be a gainer."

But people who have a longer term view can invest for two years with a 15 percent weighting on equity or three years with 25 percent in equity.

NDB Aviva Wealth Management is trying to make mutual fund buying simple by allowing investors to structure their plans according to the maturity needs.

NAMAL Acuity Value Fund Declares First Dividends

05th October 2010, www.island.lk

NAMAL Acuity Value Fund (NAVF) – a ten year closed ended Fund declares a dividend of Rs.5/- per unit from its net realised income and realised gains for the period ending 31st August 2010, a press release from NAMAL Stated.

Being a pioneering effort to enable the public to buy and sell units in NAVF through the Stock Brokers, the units were listed at the Colombo Stock Exchange on 12th October 2009 and in the secondary market the units gradually picked up from its initial offer value of Rs.50.00 to Rs 102/- per unit on 21st September 2010 This is an increase of 104% in this period. Meanwhile, the Net Asset Value (NAV) per unit published by NAMAL on the last business day of each month shown a value appreciation from Rs 48.74 at the end of September 2009 to Rs.92.23 at the end of August 2010.

This dividend amounts to an yield of 10 percent to the original investors who bought units at Rs.50/- during the Initial Public offering (IPO) and 4.9 percent for investors who purchased units at the Price of Rs 102 that prevailed at the CSE on the 21st September 2010" said Mr.S.Jeyavarman, CEO of NAMAL.

10 Leading Fund Management Companies Explore Investment in Sri Lanka. Avendus, Edelweiss, General Atlantic and Morgan Stanley among Them

19th September 2010, www.thebottomline.lk

Heads of more than 10 leading fund management companies in the international financial sphere will be in town from tomorrow to explore possibilities in investing in Sri Lanka.

The delegation consists of Avendus Capital’s MD Nikil Kapadia, Edelweiss Capital’s MD Shankar Raman, General Atlantic’s MD Abhay, ISS Shipping’s MD Eddie Filus, a representative from Morgan Stanley Infrastructure, RBC Capital Market’s Country Head for India Akhauri Sinha, RBC Capital Markets MD William Kostoff who is also the head of Global Equities, T A Associates’s MD Naveen Whadera, and MD of WL Ross Ranjeet Nabha.

A workshop titled ‘Sri Lanka Unveiled-Importing Wealth’ will also be held from Monday (tomorrow) to Wednesday with the participation of the delegates and the event is organised by the Royal Bank of Canada and the Thani Group in collaboration with the BOI, Aimlight, and Business for Peace Alliance.

According to the organisers of the workshop, the delegation has around US$ 80 billion at their disposal. Sri Lanka, currently, has a Foreign Direct Investment flow of US$ 0.6 billion.

The Tuesday session of the workshop is scheduled to be held in Trincomalee as the delegation is expected to visit there and hold discussions with the Trancomalee Chamber of Commerce. In the evening, the delegation will be flown from Trincomalee to Hambantota to hold discussions with the Hambantota Chamber of Commerce.

Apart from this delegation, representatives of several other fund managing companies such as Actis Group, Bain Capital, Carlyle Group, Cordiant Capital, and Providence Equity have sent their representatives to Sri Lanka to have a feel on the Colombo Stock Exchange which was rated one of the best performing markets in the world, The Bottom Line learns.

“They have already met key officials of several blue chips which are mainly into leisure and logistics and they have a list of 18 selected blue chips under the radar for possible investments,” a market source who did not want to be named said.

Even though Sri Lanka was rated one of the best performing markets since the end of a bloody civil war the country suffered, an element of doubt had been created by the exiting of foreigners from the market on a regular basis.

Several foreign funds which announced their interest over both private and public equity in Sri Lanka at the beginning were also seen more or less silent embedding this element of doubt to the minds of the investors.

According to analysts, the arrival of a delegation of this calibre will certainly counter this element of doubt to some extent and more foreign interest will seep through to the country as well as to the stock market.

Sri Lanka was recently placed ahead of Russia, India and China by the Fobes magazine in its ‘Countries for Business’ list and Standard and Poor increased the country’s credit rating to B+ from B.

Sri Lanka's NAMAL Acuity Value Fund Makes Progress

03rd August 2010, www.island.lk

NAMAL Acuity Value Fund (NAVF), a ten year closed ended Fund launched by NAMAL last year with its units listed on the Colombo Stock Exchange, has made steady progress, it said in a statement issued last morning.

NAMAL has been licensed by the Securities and Exchange Commission to launch and manage the NAMAL Acuity Value Fund, with the objective of investing in listed shares to generate above average return, and when necessary to convert into fixed income securities.

Being a pioneering effort to enable the public to buy and sell units in NAVF through the Stock Brokers, the units were listed at the Colombo Stock Exchange and in the secondary market the units gradually picked up from its initial offer value of Rs.50.00 to Rs 76.00 on June 30, 2010 an increase of 52% in this period.

In the mean time, the Net Asset Value (NAV) per unit published by NAMAL on the last business day of each month shows a value appreciation from Rs 48.74 at the end of September 2009 to Rs.79.61 at the end of June 2010. This works out to 63.3% unit value appreciation during this period the release further stated. During this period the unit price in the stock exchange fluctuated between the low of Rs 44.25 on November 10, 2009 and high of Rs.77.50 on June 23, 2010.

Similar to other forms of Funds offered by the Fund Managers in Sri Lanka, NAVF is an ideal investment vehicle for investors who have less expertise or time to monitor the stock market and listed security valuations to buy units of NAVF to participate in the stock market through a diversified portfolio of investments.

Fund Managers at NAMAL who have been managing the investments over many years monitor related factors and make investments in assets suitable for each fund. They have increased the asset allocation of NAVF towards the equity to gain optimum benefits from the shares of companies which have prospects for growth in the coming years, stated the CEO of NAMAL S.Jeyavarman.

NAVF has invested primarily in leisure, diversified holding and banking sectors and rest in beverages, food and tobacco, chemical & pharmaceuticals, healthcare and manufacturing sectors.

NAMAL is a licensed fund manager pioneered fund management in the industry and instrumental in launching many open ended and close ended schemes in the categories of balanced, growth, income, Sharia complaint, and gilt edged schemes.

More Info:
NAMAL Acuity Value Fund (NAVF)

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.