|Friday, 9 January 2004|
Unit Trust records good year of growth
by Steve A. Morrell
Unit Trust recorded a good year of growth. The half yearly report of the company ending September 30, showed it had correctly advised their investors at the commencement of 2003, and such recommendations produced the desired results.
However although the All Share Price Index (ASPI) appreciated 74.88% the Fund is reported to have under-performed because of small value liquid stocks appreciating during the now acclaimed bull run late September.
The fund virtually had no exposure during that crucial spell. Further scrutiny revealed that regardless of the Milanka Price Index appreciating 90.1%, for liquidity purposes the cash equivalent of 10% of the Fund be maintained as a requirement also affected the end result which was otherwise regarded a salutary inflection which buoyed and maintained investor confidence.
The equity portfolio of the Company was diversified across a narrow cross section of interests mainly concentrated in Banking, Diversified Manufacturing and the Hotel sectors.
With the expectation that the peace process could infuse a positive influence on the bourse the hotel and travel sectors saw positive investments of 10.51%, an increase from 4.73% being the previous invested financial representation.
According to the travel and tourism report last week where the Daily News exclusively reported the arrival of the 500,000th tourist, the investment portfolio of the Ceybank Century Growth Fund further mirrored the perception that investments were correctly placed to ensure maximum benefits.
By December 31, 500,000 tourists arrived further cementing projections that investments were on track.
Consequent to this investment strategy a close eye was maintained on the Colombo bourse which initially portrayed a knee-jerk reactionary outlook, with the peace process and its progress always in the background.
The resultant damage caused by the suspension of the process by the LTTE, did not augur well for the financial world and a minor slump was immediately apparent.
As reported this financial reactivity had investors concerned but as the political climate did not cause expected storms, the market settled and eventually reached heights described as unprecedented.
With the price index appreciating 19.4% for September, the All Share Price index closed at 1,292.4. Simultaneously the Milanka price index closed at 2,394.8 indicating confidence and general well-being for the Company's financial outlook.
In the manufacturing sector the equity investments recorded 560,875 shares representing 14.72% whereas plantations and Telecommunications too recorded seizable portfolios collectively representing 2.47% equity.
Trading and healthcare absorbed investments, but these were minor features in an equity investment of 2,353,104 shares within a capital outlay of Rs. 104.50 million.
Although the report under review projects a healthy outlook for investors, which may have been in print before the political infraction of November 4, it would be prudent if some circumspection is brought to bear in equity projections in the best interests of investors, the report said.
Produced by Lake House