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Ceybank Unit Trust, Sri Lanka's largest equity linked Unit Trust Fund with net assets over Rs. 860 million as at end February 2002, and managed by The Unit Trust Management Co. (Pvt) Ltd., (UTMCL), has beaten the All Share Index (ASI) once again by 10.4% margin during the financial year ending March 31,2002.

The ASI has grown by 45.8% and Ceybank Unit bid price appreciated by 56.2%. In the FY 00/01 Ceybank Unit Trust has beaten the ASI by 7.4% margin while in the FY 99/00 it has beaten the index by 10.2% margin thus showing consistent performance.

The Manager, UTMCL, with the concurrence of the Trustee to the Fund, Bank of Ceylon, have announced an increased divided of 40 cents per unit to all the registered unit holders of the Fund as at March 31, 2002. This amounts to an increase of 14% 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 9.0% 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% increase from the last year's distribution of Rs. 47 million.

The unit holders have the option to reinvest this dividend in the Fund without the usual 5% front-end fee.

The Fund was launched in March 1992 by the UTMCL when the ASI was at 800 levels. Bank of Ceylon, Merchant Bank of Sri lanka, Carson Cumberbatch, Unit Trust of India and HSBC Asset Management promoted the UTMCL.

However in late 2001 Sri Lanka Insurance Corporation acquired the 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 has been aggressively acquired at very low prices and disposed of less potential ones.

The Fund's investment in the equity has been increased to 76% by the year-end from the previous year's 63%. This aggressive strategy paid off as shown by the exceptional performance. The ASI has grown by 45.8% and Ceybank Unit bid price appreciated by 56.2% during the FY 01/02.

The Government appears to be more committed to better fiscal management, accelerate the development of infrastructure, and some positive news can be expected towards the political settlement of the conflict in the North. This can be the silver lining to the capital market and 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.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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