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| Sunday, 21 April 2002 |
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| News Business Features Editorial
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Ceybank Unit Trust beats All Share Index Ceybank Unit Trust, one of the largest equity linked unit trust funds with net assets over Rs. 860 million as at end-February 2002, and managed by Unit Trust Management Co., (Pvt) Limited. (UTMCL) has beaten the All Share Index (ASI) once again by 10.4 per cent margin during the financial year (FY) ending March 31, 2002. The ASI has grown by 45.8 per cent while the Ceybank Unit bid price appreciated by 56.2 per cent. In the FY 2000/01 Ceybank Unit Trust beat the ASI by 7.4 per cent while in the FY 99/00 it beat the index by a 10.2 per cent margin, thus showing consistent performance, the company said in a news release. UTMCL, with the concurrence of the trustee to the fund, Bank of Ceylon, has announced an increased dividend of 40 cents per unit to all the registered unit holders of the Fund as at March 31, 2002. This is an increase of 14 per cent over the previous year's dividend of 35 cents per unit. Based on the Ceybank Unit Trust offer prices as at April 1, 2001, this gives a dividend yield of nine per cent to its unit holders in addition to the capital appreciation. The manager has decided to utilise Rs. 53 million for distribution for the FY 01/02 which is a 12 per cent increase from last year's distribution of Rs. 47 million. The unit holders have the option to reinvest this dividend in the Fund without the usual five per cent front-end fee. The Fund, according to the release, was launched in March 1992 by UTMCL when the ASI was at the 800 level. Bank of Ceylon, Merchant Bank of Sri Lanka, Carson Cumberbatch, Unit Trust of India and HSBC Asset Management promoted UTMCL. However, late last year, Sri Lanka Insurance Corporation acquired Merchant Bank of Sri Lanka's stake in UTMCL. The fund manager with the intention of achieving capital growth with the expected upward movement of the market in the medium term, has done major changes in the asset allocation. Taking advantage of the downturn in the market, some of the blue chip shares of potential value have been aggressively acquired at very low prices and less potential ones disposed of. The Fund's investment in equity has been increased to 76 per cent by the year end from previous year's 63 per cent. This aggressive strategy has paid off as seen by the performance. The government appears to be more committed to better fiscal management and accelerating the development of infrastructure. Positive news can also be expected towards the political settlement of the conflict in the North it said. The Colombo bourse is most likely to turn around on the positive news. The Fund's investments are well diversified and the equity is heavily weighted towards banking, manufacturing and diversified sectors. These sectors are expected to rebound and therefore, Ceybank Unit Trust is well placed to take advantage of the expected upward market movement. "Therefore, investors of Ceybank Units can expect fair capital gains in the medium term with the recovery of the market," the company said. |
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