Fund Manager: Candor Asset Management (Pvt) Ltd

Transcription

1 CANDOR OPPORTUNITIES FUND QUARTERLY REPORT March 2018 Fund Manager: Candor Asset Management (Pvt) Ltd

2 CONTENTS PAGE Fund Manager s Report 2-3 Statement of Profit or Loss and Other Comprehensive Income 4 Statement of Financial Position 5 Statement of Movement in Unit Holders Funds 6 Cash Flows Statement 7 Explanatory Notes 8 Unit Information 9 Management Company and Fund Information

3 Dear Investor, We are pleased to present the Candor Opportunities Fund quarterly report for the quarter ending 31 st March The All Share Price Index (ASPI) moved up by 1.69% while the Fund has grown by 4.61% for the three-month period ending 31 st March 2018; the Fund has outperformed the benchmark by 2.92%. Foreign investors continued to be active in the share market with a total foreign participation of LKR 62.4 billion in the 3 month period vs. LKR 45.7 billion in the same period last year; on a net basis, foreign investors were net sellers in the first quarter primarily on the strategic sale of Lanka ORIX Leasing Company PLC (LOLC) by Orix Corporation of Japan. The weighted average repo rate moved up from 7.59% at end December 2017 to 8.21% at end March 2018 while the overall money market liquidity was in surplus throughout the quarter in review. Benchmark 3 month, 6 month and 12 month Treasury bill yields moved up by 0.48%, 0.22% and 0.79% to 8.17%, 8.52% and 9.69% respectively during 1Q2018. Meanwhile inflation as measured by the Year on Year increase in the Colombo Consumer Price Index decreased from 7.1% in December 2017 to 4.2% in March 2018 as a result of moderating of prices in the Food category. Food related prices saw record high levels in 2017 as a result of weather related supply disruptions, higher indirect taxes, and higher global commodity prices. Looking ahead, the Central Bank of (CBSL) is targeting inflation to be in the range of 4-6 percent and hopes to achieve same with a proposed Flexible Inflation Targeting framework. The Rupee has depreciated by 2.00% in 1Q2018 vs. a depreciation of 1.28% during the same period last year. Barring any unforeseen events, we expect depreciation of the LKR to the US dollar to be in the range of 2-3% in the year 2018 as the Government is issues sovereign bonds to meet debt obligations whilst further inflows are expected in the form of Foreign Direct Investments. Overall Asset Allocation of the Portfolio as at 31 st March 2018 Short term fixed income securities inclusive of cash and other net assets 44% Equity Securities 56% Source: Candor Asset Management (Pvt) 2

4 Equity Allocation by Sector as at 31 st March 2018 (As a percentage of total market value of equity holdings) Beverages, Food & Tobacco 0.04% Construction & Engineering 3.60% Healthcare 6.49% Motors 6.67% Plantations 7.36% Banks, Finance & Insurance 7.82% Power & Energy 8.59% Hotels & Travels 11.52% Manufacturing Diversified 23.32% 24.59% Fixed Income Securities Allocation as at 31 st March 2018 (As a percentage of total investment in fixed income securities) Deposits in banks & finance companies 50% Repo Investment 50% Source: Candor Asset Management (Pvt) Source: Candor Asset Management (Pvt) Ltd Source: Candor Asset Management (Pvt) Ltd The exposure to equity has reduced during the quarter as a result of rebalancing of the portfolio. Given the attractive Price to Earnings Ratio of the market, the Fund Manager is in the process of increasing the Fund s exposure to equity in the ensuing months. Fund Manager is positive on the market s potential to attract investments and is positive on selected counters in the Construction, Diversified, Financial Services, Hotels and Manufacturing sectors. Ravi Amarasinghe, CFA Chief Investment Officer / Fund Manager 3

5 CANDOR OPPORTUNITES FUND Quarterly Report March 2018 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME INVESTMENT INCOME For the quarter ended Dividend Income 6,416,985 3,567,465 Interest Income 2,747,297 2,948,506 Realised (Losses) / Gains on Financial Assets Held at Fair Value Through Profit or Loss (38,761) 2,466,946 Unrealised Gains / (Losses) on Financial Assets Held at Fair Value Through Profit or Loss 17,726,843 (17,726,154) Total Investment Income 26,852,364 (8,743,237) EXPENSES Management Fees (2,457,412) (2,430,548) Trustee and Custodian Fees (280,006) (277,689) Audit Fees (28,358) (28,356) Other Expenses (1,720,222) (1,294,400) (4,485,998) (4,030,993) NET PROFIT / (LOSS) BEFORE INCOME TAX 22,366,366 (12,774,230) Income Tax Expense - (20,353) NET PROFIT / (LOSS) AFTER INCOME TAX FOR THE PERIOD 22,366,366 (12,794,583) INCREASE / (DECREASE) IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS 22,366,366 (12,794,583) 4

6 STATEMENT OF FINANCIAL POSITION ASSETS As at As at (Audited) Cash and Cash Equivalents 3,076, ,635 Financial Assets - Loans and Receivables 182,597,332 69,166,766 Financial Assets Held at Fair Value Through Profit or Loss 285,060, ,016,610 CDS Receivables 32,437,584 - Other Receivables 1,998,003 11,290,000 Income Tax Receivable 1,892,297 1,617, ,062, ,830,033 LIABILITIES CDS Payable - 194,656 Accrued Expenses 1,110,003 1,049,738 1,110,003 1,244,394 NET ASSETS 505,952, ,585,639 UNIT HOLDERS' FUNDS Net Assets Attributable to Unit Holders 505,952, ,585,639 These Financial Statements were approved by the Management Company, and adopted by the Trustee. Signed for and on behalf of the Manager and the Trustee by; Director Management Company Director Management Company Trustee 3 May

7 STATEMENT OF MOVEMENT IN UNIT HOLDERS' FUNDS For the quarter ended UNIT HOLDERS' FUNDS AS AT BEGINNING OF THE PERIOD 483,585, ,903,343 Increase / (Decrease) in net asset attributable to unit holders 22,366,366 (12,794,583) UNIT HOLDERS' FUNDS AS AT END OF THE PERIOD 505,952, ,108,760 6

8 CASH FLOWS STATEMENT For the quarter ended Cash Flows from Operating Activities Interest Received 1,902,029 2,710,057 Dividend Received 5,708,982 3,074,965 Management Fees, Custodian Fees and Trustee Fees Paid (2,705,511) (2,738,958) Other Expenses Paid (1,720,222) (1,294,399) Sale proceeds from Sale of Equity Securities 150,084,557 42,009,537 Purchase of Equity Securities (38,072,741) (108,374,441) Net Investment in Treasury Bill/Bond Repurchase Agreements (22,860,573) 33,427,356 Net Investment in Trust Certificates - 30,531,587 Net Cash Flow generated from / (used) in Operating Activities 2,336,521 (654,296) Net Increase / (Decrease) in Cash and Cash Equivalents 2,336,521 (654,296) Cash and Cash Equivalents at the beginning of the period 739,635 2,121,756 Cash and Cash Equivalents at the end of the period 3,076,156 1,467,460-7

9 EXPLANATORY NOTES 1. GENERAL INFORMATION Candor Opportunities Fund (the Fund) is close-ended listed unit trust Fund approved by the Securities and Exchange Commission of. The Fund was launched on 20 October The Fund is created and established for a 5 years commencing from the date of allotment 20 November The Fund is managed by Candor Asset Management (Private) Limited which is incorporated and domiciled in Sri Lanka. The registered office of the management company is located at level 08, South Wing, Millennium House, 46/58, Nawam Mawatha, Colombo 02. The trustee of the Fund is Deutsche Bank AG having its place of business at No 86, Galle Road, Colombo 03. The investment objective of the Fund is to achieve growth of capital and income to Unit Holders by adopting a dynamic asset allocation strategy for investment in listed equities and in fixed income securities. 2. BASIS OF PREPARATION All figures for the period ended 31 March 2018 are provisional and unaudited. The quarterly financial statement have been prepared and presented in accordance with Accounting Standards. There were no changes to the Accounting Policies and methods of computation since the publication of the Annual Report The financial statements are presented in n rupees. 8

10 UNIT INFORMATION 1 Related party unit holding as at 31 March 2018 Unit holder Mr. Dharshan Ravindra Abeysuriya Relationship Director of the Management Company No. of Units 100,000 Mr. Ravindra Amarasinghe Chief Investment Officer 1,500,000 Eagle Proprietary Investments Limited Parent Company of the Management 10,000,000 Company 2. Unit Price Movement The unit market prices during the quarter ended 31 March 2018 Highest Price Lowest Price Last Traded Price 3. Net Asset Value of a unit as at 31 March 2018 is for the quarter ended List of 20 major Unit Holders based on their unit holdings as at 31 March 2018 Name of the Unit holder No. of Units Holding % Eagle Proprietary Investments Limited 10,000, % Perpetual Holdings Ltd 10,000, % Thurston Investments Limited 5,000, % Bartleet Religare Securities (Pvt) Ltd 2,500, % Housing Development Finance Corp 2,500, % Janashakthi General Insurance Limited 2,500, % Ravindra Amarasinghe 1,500, % Dinal Asanka Peiris 1,010, % Horanagamage Don Anton Damascene 1,000, % Mallory Eraj Wijesinghe 1,000, % Life Insurance Corporation (Lanka) Ltd 650, % Upali Amarasinghe 500, % Bartleet Asset Management (Pvt) Ltd 500, % Code-Gen International Pvt Ltd 500, % Wen Chieh Teng 414, % Ajith Surendra Ratnayake 379, % Built Element Limited 300, % Lamurep Investments Limited Accoimited Account 300, % Ravindra Rajakariar 300, % Visvanathamoorthy Govindasamy 250, % Sandya Kumari 250, % 9

11 MANAGEMENT COMPANY INFORMATION Managing Company Board of Directors of Managing Company Candor Asset Management (Pvt) Ltd Level 8, South Wing, Millennium House 46/58, Nawam Mawatha Colombo 02 T: F: Web: Mr. Ahmad Mohammed Hassan Hussein (Chairman) Mr. Rajiv Nandlal Dvivedi Ms. Sharon Veronica D Souza Mr. Dharshan Ravindra Abeysuriya Bankers Nations Trust Bank PLC No 242, Union Place Colombo 2 Deutsche Bank AG 86, Galle Road Colombo 03 Auditors Lawyers KPMG Chartered Accountants 32A, Sir Mohamed Macan Markar Mawatha Colombo 03 Nithya Partners Attorneys-at-Law No. 97A, Galle Road Colombo 03 10

12 FUND INFORMATION Registrar Trustee and Custodian Candor Asset Management (Pvt) Ltd Level 8, South Wing Millennium House 46/58, Nawam Mawatha Colombo 02 Deutsche Bank AG 86, Galle Road Colombo 03 Auditors Lawyers Ernst & Young 201, De Saram Place Colombo 10 Nithya Partners Attorneys-at-Law No. 97A, Galle Road Colombo 03 11