For the Six months ended 30 th September 2015

Transcription

1 Interim Report For the Six months ended 30 th September 2015 National Asset Management Limited Union Bank Building, 64, Galle Road, Colombo 3. Phone : Fax : info@namal.lk

2 Interim Report 2015 Table of Contents Report of the Investment Manager 1 Statement of Comprehensive Income 2 Statement of Financial Position 3 Statement of Movement in Unit Holders Fund 4 Notes To the Acccounts 5 8, Corporate Information 9

3 NAMAL EQUITY FUND INTERIM REPORT Dear Investor, We take pleasure in presenting the interim report of the Namal Equity Fund (NEF) for the six months ended 30 th September Performance Review The NEF generated a return of 4.92% for the six month period under review, outperforming the benchmark All Share Price Index (ASPI) and the S&P Sri Lanka 20 Index (S&P SL20), which gained 3.38% and fell by 0.68%, respectively. For the period ended September 2015, the Fund s total investment income declined 58.8% YoY to Rs m driven by unrealized losses on fund`s equity holdings. Performance of Sri Lanka equity market was particularly weak during the first half of the year considering the political and policy uncertanities that prevailed over the period. Despite poor market conditions, investment income from dividends, interest and realized gains recorded a significant increase of 215%. The fund recorded a profit of Rs m for the six months under review, a decrease of 65.6% YoY. Market Review The ASPI decreased 3.40% YTD (Jan-Sep 2015) while the S&P SL20 declined 6.43% YTD (Jan-Sep 2015). The average daily turnover dropped to Rs 1,081m during the six months from Rs 1,510m in the comparative period last year. Sri Lankan equity market witnessed a net outflow of Rs. 6.1bn (Apr-Sep 2015) as foreign investors exited emerging markets on the fear of economic slowdown and the US rate hike. Foreign participation stood at 30.6% of turnover for the six month ending September. Performance Comparison 6M* (%) (Non-annualised returns) 12M (%) 24M (%) 36M (%) ASPI S&P NEF * Six month period ending 30 Sep 2015 Asset Allocation 18% 4% 78% Equity Repos Debentures Benchmark 12 month Treasury bill auction yields increased by 38 basis points to 7.18% over the six month period under review. CBSL reduced its policy rates by 50bps in April 2015 and accordingly, Standard Deposit Facility and Standing Lending Facility were reduced to 6.00% and 7.00%, respectively. In subsequent monetary policy reviews, CBSL kept policy rates unchanged. Inflationary pressures eased with the CCPI (annual average) declining from 2.5% to 0.7% by September On the economic front, the Balance of Payments position deteriorated to record a deficit of USD 1.8b in the first eight months of the year, compared to a surplus of USD 2.1b over the corresponding period of Trade deficit widened by 5.0% YoY to USD 5.4b. Earnings from tourism and workers remittances increased during the period by 17.1% YoY (USD 1.8b) and 1.8% YoY (USD 4.5b), respectively. Portfolio Composition The Fund has a 77.9% allocation to equity, with the remainder in Debentures and Repos. NEF s highest equity concentrations are in banks finance and insurance sector followed by manufacturing and power and energy sector. 11% 8% 11% Sector Allocation Banks, Finance and 7% 2% Insurance Manufacturing 31% Power and Energy 30% Top 5 Equity Holdings Diversified Healthcare Beverage, Food and Tobacco Telecommunications Notable position changes at individual stock level were establishing positions in Dialog, ACL, Softlogic Holdings and Hemas Holdings. We also divested our positions in Asiri Hospitals and Hotel Services (Kingsbury). Tokyo Cement Sampath Bank Lanka IOC 6.03% 6.40% 6.59% Sincerely, The Fund Management Team 15 th October 2015 Hemas 8.22% Central Finance 9.97% 0% 5% 10% 15% 1 *As a % of total equity holdings

4 STATEMENT OF COMPREHENSIVE INCOME For the six month period ended September NATIONAL EQUITY FUND Notes INVESTMENT INCOME Dividend income Interest income Net realised gains on financial assets held for trading Net change in unrealised gains/(losses) on financial assets held for tradi 7.5 (157.72) Total investment income EXPENSES Management & Registrar fees (21.11) (18.83) Trustee fees (2.68) (2.25) Audit fee and expenses (0.29) (0.22) Bank charges (0.02) (0.02) Professional charges (0.04) (0.03) Other expenses (9.60) (6.67) Total operating expenses (33.73) (28.02) Net operating profit/(loss) FINANCE COST Interest expense (0.01) (0.03) Distribution to unit holders PROFIT/(LOSS) AFTER DEDUCTIONS AND BEFORE TAX Income tax expense (0.25) PROFIT/(LOSS) AFTER DISTRIBUTIONS AND TAX INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS

5

6 Statement of Movements in Unitholder's Fund For the six month period ended September Rs.Mn. Rs.Mn. UNIT HOLDERS' FUNDS AT THE BEGINNING OF THE YEAR 2, , Increase/ (decrease) in net assets attributable to Unit Holders Received on unit creations Payments on unit redemptions (71.08) (59.84) UNIT HOLDERS' FUNDS AT THE END OF THE YEAR 2, , Net Assets Value per Unit Applicable to 71,334,017.6 units as at Applicable to 67,888,823.0 units as at

7 Notes to the Financial Statement For the six month period ended Septembe NATIONAL EQUITY FUND All figures are provisional and unaudited. Where necessary comparative figures have been 1 adjusted to confirm with the changes in presentation in the current period. 2 Income is recognised on accrual basis 3 Interest on repurchase agreements is shown together with the applicable notional tax credit which is set off against the income tax payable by the fund. 4 The profit and income of the fund is liable for income tax at the rate of 10% for the year of assessment 2015/2016 as specified in part A of the Second Schedule to the Inland Revenue Act No. 10 of There are no material Contingent Liabilities or contingent Assets which require disclosure in the financial statements. No circumstances have arisen since the Balance Sheet date, which would require adjustments or disclosure in the Financial Statements. 5

8 Notes to the Financial Statements For the six month period ended September 7. FINANCIAL ASSETS HELD FOR TRADING Quoted equity securities (7.1) 1, , Debt securities quoted debentures (7.2) Government treasury bill 48 2, , Quoted equity securities Cost as at 30 September 1, , (Depreciation) /appreciation of market value quoted equity securities Market Value as at 30 September 1, , Company Number of Market Holdings Number of Market Holdings Shares Value as a % of Shares Value as a % of Net Asset Net Asset Rs.Mn. Value Rs.Mn. Value Banks, Finance and Insurance Central Finance Company PLC 991, % 674, % Sampath Bank PLC 615, % 600, % Nations Trust Bank 842, % 415, % Seylan Bank NV 1,253, % 1,208, % % % Beverages, Food and Tobacco Cargills PLC 400, % Nestle Lanka 15, % Sunshine Holdings 1,095, % Renuka Agri Foods PLC 8,955, % 8,955, % % % Diversified Holdings Hemas Holdings 2,405, % % Health Care Ceylon Hospitals PLC (Durdans) 997, % 997, % Ceylon Hospitals PLC (Durdans) Non Voting 481, % 481, % Asiri Hospitals PLC 22,750, % % % Hotels and Travels Hotel Services (Ceylon) PLC 2,200, % % Manufacturing ACL Cables PLC 1,059, % 959, % Tokyo Cement PLC Non voting 2,591, % 2,951, % Tokyo Cement PLC voting 3,000, % 2,940, % Textured Jersey 4,000, % Chevron Lubricants 220, % % % Investment Trusts Renuka Holdings PLC 1,270, % % Power and Energy Laugfs Gas PLC 1,318, % 1,183, % Lanka IOC 3,975, % 3,975, % Telecommunications % 9% Dialog 4,000, % % Total value of quoted equity securities (At Market Value) 1, % 1, % 6

9 Notes to the Financial Statements For the six month period ended September 7. FINANCIAL ASSETS HELD FOR TRADING (contd..) 7.2 Quoted debentures Cost Market Holding as a Cost Market Holding as a Value % of Net Value % of Net Asset Value Asset Value Lion Brewery (Ceylon)PLC % % Lion Brewery (Ceylon)PLC % % Lion Brewery (Ceylon)PLC % % Hayleys PLC % % Richard Pieries % % Hemas Holding PLC % % Lanka Orix Leasing Company PLC % % % 7.3 Treasury Bonds Government treasury bills Net realised gains/(losses) on financial assets held for trading Equity securities Proceeds on Sale of Equity Shares Average Cost of Equity Shares Sold (336.65) (248.79) Net change in unrealised gains/(losses) on financial assets held for trading Equity securities (155.87) Debt securities quoted debentures (1.85) 3.04 (157.72) FINANCIAL ASSETS LOANS AND RECEIVABLES Carrying Holding as a Carrying Holding as a Value % of Net Value % of Net 8.1 Repurchase agreements Rs.Mn. Asset Value Rs.Mn. Asset Value First Capital Treasuries Limited % Wealth Trust Securities % % Commercial Bank PLC % 0% DFCC Vardana Bank % % % % % % 7

10 Notes to the Financial Statements For the six month period ended September 9. ACCRUED INCOME AND OTHER RECEIVABLES Dividend receivable Receivable on unit creations CDS Receivable ACCRUED EXPENSES Fund management & Registrar fee payable Trustee fee payable Audit fee Unit Holder payable Other payable INVESTMENT INCOME Dividend income on, Interest income Interest on Treasury bill repurchase agreements (11.2.1) Interest on fixed deposits 1.52 Interest on commercial papers Interest on debentures Interest on savings Interest income on Treasury bill repurchase agreements has been recognised gross of notional taxes. 8

11 CORPORATE INFORMATION NATIONAL EQUITY FUND Interim Report 2015 Trustee & Custodian Auditors Bankers Lawyers Managers & Registrars Deutsche Bank AG 86,Galle Road Colombo 03 Ernst & Young Chartered Accountants 201, De Saram Place Colombo 10 Deutsche Bank AG 86, Galle Road Colombo 03 F J & G De Saram Attorneys at Law & Notries Public 216, De Saram Place Colombo 10 National Asset Management Limited (NAMAL) Union Bank Building 64,Galle Road Colombo 03 National Asset Management Limited Board of s (As of September 30, 2015) Mr. Alexis Lovell Mr.Ajith Wijeyasekera Mr. Indrajit Wickramasinghe Mr. Palitha Gamage Mr. Tyronne de Silva Mr. Malinda Samaratunga Mr. Suren Madhanayake Mr. Avancka Herat Ms. Khoo Siew Bee Chairman Deputy Chairman 9