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| Tuesday, 13 July 2004 |
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Exceptionally good year for unitholders of Namal Funds National Asset Management Limited (NAMAL), Managers of National Equity Fund (NEF) NAMAL Growth Fund (NGF) and NAMAL Income Fund (NIF) released the Annual Report of the funds for the year ended March 31, 2004. The year under review was an eventful year to the investors in NAMAL Funds' a press release from NAMAL said. The NEF, a pioneering fund launched in Sri Lanka in 1991 recorded 46.37 percent value appreciation while maintaining its conservative approach in stock investments and distributed Rs 2 per unit as tax free dividends in March 2004, the highest ever dividend in its history. Meanwhile, NGF a more pro-active fund in the stock market recorded 60.59 percent value appreciation in this period. NGF adopted active asset allocation policy to control market risk and to protect investors when in adverse periods. NIF invests its fund in fixed income securities with the objective of optimising current income to investors, continued to remain in short term maturities in a rapidly falling interest rate environment. NIF recorded 7.46 percent value appreciation and distributed two dividends amounting to 96 cents per unit in line with its objective of giving current income to its investors. Moreover lack of quality high yielding corporate papers affected the return from NIF's fixed income investments in this period. Notwithstanding the political uncertainty in the third and fourth quarters, the macro economic conditions improved during the year under review. The better domestic conditions as a result of continuation of ceasefire, strong financial consolidation efforts, accommodative monetary policy, renewed commitment to structural reforms and an improved external environment contributed to the turnaround of the economy. The GDP growth rate of 5.9% achieved in 2003 brought a more optimistic environment to the investors. The market interest rate continuously declined over a year, started to pick up during December. Although the interest rates improved slowly since then, the one year treasury bill rate, a benchmark indicative rate closed at 7.66% in March 2004 still well below the rate of 9.04% prevailed one year before in March 2003. Colombo Stock market performance was exceptional in the first half of the year lagged during November and December. Mostly, due to political uncertainty and the introduction of tax on the profits from the share trading. Overall, it was an outstanding year for Colombo Stock Market with All Share Price Index (ASPI) increasing by 73.8%. Even though at times market was very volatile reacting to political events, the sustenance of the market have been related to the optimism generated by the continuation of the ceasefire, the growth of the economy and the expectation of excellent corporate profits. The National Equity Fund registered a total earnings of Rs 495.21 million for the year ended March 31, 2004 against Rs 217.9 million in the previous year. Total return after unit holders activities improved in this year from Rs 214.3 million to Rs 339.0 million. NEF distributed Rs 146.2 million as dividends to the unit holders. At the end of March 2004, NEF distributed Rs 11.25 per unit as dividends from its inception in 1991. The original unit holders who have reinvested their dividends in the same fund yielded an annualised return of 11.03%. NEF had an asset allocation of 51% in equity and the balance in fixed income instruments at the end of the financial year. The NAMAL Growth Fund's total earnings stood at Rs 61.7 million as on March 31, 2004 against Rs 16.87 million reported in the previous year. Total return after unit holder activities amounted to Rs 61.8 million compared to 16.4 million recorded in the previous financial year. At the end of March 2004, NGF's original unit holders who have reinvested their dividends in the same fund yielded an annualised return of 11.2%. At March 31, 2004 NGF has an asset allocation of 56% in equity and the balance in the short term money market investments to control market risk from general uncertainties prevailed in the country. The NAMAL Income Fund recorded a total earning of Rs 14.1 million in the year ended March 31, 2004 against the Rs 12.5 million made in the previous year. The increase in the earnings mainly attributed to the increase in fund size by Rs 58.1 million. NIF distributed Rs 15.4 million as dividends in this period. At the end of the financial year under consideration, original unit holders who have reinvested their dividends in the same fund yielded an annualised return of 13.05%. NIF's investments in the fixed income securities mainly had investments with maturities less than one year at the end of the period. NAMAL is the pioneer fund management company in Sri Lanka commenced operations in 1991 and is a subsidiary of DFCC Bank. NAMAL provides a host of services to investors to manage their savings and plan their taxes. |
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