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Sunday, 13 September 2009

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MBSL to manage AFL, CIRL

To strengthen the stability of Asian Finance Ltd. (AFL) and Ceylinco Investment & Realty Ltd. (CIRL), the Central Bank of Sri Lanka has called upon the Merchant Bank of Sri Lanka PLC (MBSL) to function as the Managing Agent of these two companies.

Lankaputhra Development Bank Ltd. (LDB), which functioned as the Managing Agent, has performed its initial task in establishing stability and restoring public confidence in AFL and CIRL.

Having stabilised the situation, it is now considered necessary to strengthen AFL and CIRL and restore their normal business operations to strengthen the viability of the companies.

In that regard, MBSL has been invited to provide its expertise and to take AFL and CIRL forward. The Monetary Board, having considered the vital role to be played by LDB in the on-going development projects in the country, particularly, in the North and East, has decided that it is more appropriate to release LDB from the responsibilities as the Managing Agent and to appoint MBSL as the Managing Agent of AFL and CIRL with effect from 01 September 2009. LDB will work closely with MBSL to ensure the smooth transition of the Managing Agents' functions and the strengthening of the business operations of AFL and CIRL.

An overall advisory body, consisting of the members of the Expert Group would also provide overall guidance on charting the future course of action of AFL and CIRL. The Central Bank will closely monitor the affairs and the progress of the two companies.

The Central Bank is of the view that this procedure would enable Asian Finance Ltd. and Ceylinco Investment & Realty Ltd. to further strengthen the restored confidence, and return to their normal business operations, within a short period of time.


NAMAL Acuity IPO for higher returns

The Rs. 1 billion Fund, will be the first closed ended Unit Trust to be listed on the CSE. National Asset Management Limited (NAMAL) and Acuity Partners announced the Initial Public Offering (IPO) of the NAMAL Acuity Value Fund which will become the first closed ended Unit Trust to be listed on the Colombo Stock Exchange (CSE).

The Rs.1 billion 10 year Fund will give the public the option of investing in listed equities and listed and unlisted fixed income securities.

The NAMAL Acuity Value Fund is managed by NAMAL, a unit trust management company licensed and regulated by the Securities and Exchange Commission of Sri Lanka with 18 years of experience. The Fund is sponsored by Acuity Partners, a joint venture of DFCC Bank and Hatton National Bank PLC. The trustee and custodian to the fund is Deutsche Bank.

Twenty million units are on offer at Rs.50 per unit, and the minimum investment is Rs. 10,000. The Fund will be liquidated in 10 years and during this period the units will be tradable on the CSE.

Adopting a dynamic asset allocation strategy, the fund assets will be invested in both equities and fixed income securities depending on the prevailing investment climate. This strategy is expected to limit any downside risk while capitalising on upward movements in the stock market.

Commenting on the IPO, CEO, NAMAL, S. Jayavarman said, the IPO comes at an ideal time. With the conclusion of the conflict, and the anticipated resurgence of the local economy, fund managers and investors are displaying renewed interest in the Sri Lankan equities market.

Through the Fund, investors can benefit from one of the best performing share markets in the world and diversify their investments across a range of companies and industry sectors. Investors can expect attractive investment returns through the full time fund management expertise provided by a licensed fund manager with an excellent track record.

CEO, Acuity Partners, Ray Abeywardena elaborated on the benefits to be accrued via the IPO, Unlike in open ended unit trusts prevalent in Sri Lanka, the closed ended NAMAL Acuity Value Fund is not subject to the risk of early redemption. Therefore the potential returns are higher.

The unit holder can sell units at the prevailing market price on the CSE during the 10 year period until liquidation. The ability to shift funds between the equities market and debt securities markets enables the Fund Manager to seek to preserve capital while giving the flexibility to capture the best returns available during the investment cycle. Unit Trusts are the ideal investment vehicle for investors who may not have the time and the expertise to invest directly in the stock market. Unit Trusts provide the benefit of professional investment expertise and the convenience of investing in a managed fund.


First Guardian Equities featured on Bloomberg and CNBC

First Guardian Equities, a Sri Lankan stock brokerage firm based at Colombo's World Trade Centre, was recently featured on Bloomberg and CNBC, two globally renowned media networks with regard to the thriving stock market in Sri Lanka. Director, First Guardian Equities Ranjan Hulugalle, who was on a road show in Singapore with the objective of generating awareness on investment opportunities in Sri Lanka was featured on the Bloomberg Edge, as well as CNBC news on August 17 discussing the rising investment opportunities and future financial prowess in the post-war nation.

Speaking to Bloomberg, Hulugalle said that the Sri Lankan economy reported a 1.5% growth in the first quarter, followed by a 28% increase in tourist arrivals in July this year. These were positive signs for the Lankan economy in the first quarter, and with the Sri Lankan Index being at 67% last week it was seen as initiating much interest among foreign investors. The Bloomberg Edge went on to state that investors such as Soros, Mobius and Rogers are among the investors eyeing investments in Sri Lanka.

Hulugalle was also featured on another global network CNBC which rarely touches on frontier markets such as Sri Lanka. Talking to CNBC's Oriel Morrison, Hulugalle was quoted saying that despite a recent run-up in Sri Lanka's stocks, there is huge upside potential in that market.

First Guardian Equities (Pvt) Ltd, is the country's only internationally certified brokerage for systems standardisation and offers clients investment research and cutting edge financial consulting. Its Shareholders include Guardian Equity, the Hirdaramani Group, Raj Rajaratnam and S.K. Wickremesinghe.

Currently its board comprises of the Chief Executive Officer Rohan Goonewardene, while B. R. L. Fernando, Ranil Pathirana and Ranjan Hulugalle serve as non-executive directors.


Seylan Bank Public Share Issue on Sept 22

The Seylan Bank launch its Public Offering of 54,290,000 Ordinary (Voting) Shares at Rs. 35/- per share.

The Issue will open to the public on September 22. However, investors can apply from now on. The Prospectus and Application Forms are available at all Seylan Bank branches islandwide and at the member firms and trading members of the Colombo Stock Exchange.

The Bank's existing Ordinary (Voting) Shareholders registered as at end of trading on September 02 will be given preference on allotment, upon the application being made, to a minimum of one share for every two shares held, subject to prevailing shareholding limits under the Banking Act.

The minimum subscription for the public per application is Rs. 3500 or 100 shares and in multiples of 50 (Rs. 1,750/-) thereafter.

The total amount proposed to be raised through the Public Share Issue is Rs. 1.9 Bn.

The basis of allotment will be decided by the Board of Directors of the bank before the expiry of seven market days from the closure of the Issue in the event of an oversubscription.

Chairman, Seylan Bank, Eastman Narangoda said that the primary reason for launching the Share Issue was to strengthen the capital base of the bank to facilitate wide ranging future expansion plans that are in the pipeline.

The Bank will also be issuing 32,150,000 new Ordinary (Voting) Shares at Rs. 35 each by means of a Private Placement, out of which Bank of Ceylon is to take up 13 Million Ordinary (Voting) Shares and Sri Lanka Insurance Corporation taking up the balance 19,150,000 Ordinary (Voting) Shares, thus totalling 24.7 per cent of the increased capital.

The National Savings Bank already holds a 3.5 per cent stake in Seylan Bank.

The total capital expected to be generated from the Private Placement and Public Offering will be Rs. 3.0 Billion.

With the allotment of new shares to the State-held Bank of Ceylon and Sri Lanka Insurance Corporation under the private placement, the total stake held in the Seylan Bank by State institutions will be 28% of the increased capital.

The shares held by the Bank's Employee Share-owing trusts will amount to a further 9 percent of the increased capital.


Hemas ready to build another thermal plant

Hemas Power will set up another thermal plant and support the national energy requirement if the government invites the company, said Managing Director, Hemas Power Ltd., Kishan Nanayakkara.

He was addressing the media at a ceremony on Tuesday to launch the company's second Initial Public Offering (IPO).

Nanayakkara said the power sector has immense potential to contribute to economic growth. Rural electrification could be enhanced through the use of non-conventional renewable energy sources such as wind and biomass.

The IPO was launched to raise funds to construct the 4.2 mega watt small hydro power plant at Deraniyagala and acquire and develop other projects. The IPO consists of 31,300,000 Ordinary shares issue through an offer for subscription. The Hemas IPO is hailed as the first corporate IPO in the post war era and is expected to raise between Rs. 532 million to Rs. 626 million.

The Offer will be 25 percent of the share capital (post IPO), hence the float. The share offer price will be determined via a book building process.The price will range from Rs. 17, Rs. 18, Rs. 19 and Rs. 20.

The share issue will be managed by NDB Investment Bank. The IPO will be open on September 17.

(LF)

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