Following invitation by Ceybank Unit Trust Funds:

Unit Trust of India mulls investments in Lanka

Hiran H. Senewiratne

Unit Trust of India (UDI), India’s second largest fund management company is exploring the possibility of investing in Sri Lanka following the invitation extended by Ceybank Unit Trust Funds recently.

“UDI being one of the main stakeholders of Ceybank Trust has expressed interest for further investments in Sri Lanka,” Ceybank Chairperson Siromi Wickramasinghe told the Daily News Business.

She said they have held cordial discussions with UDI Chairman/Managing Director U.K Singha in Mumbai. They are willing to invest in the Sri Lankan capital market especially in the unit trust market and the stock market. This would enable the influx of foreign funds to Sri Lanka from the medium to long term perspective, she said.

UDI was one of the five stakeholders involved in setting up the Unit Trust Funds 15 years ago. The other stakeholders are Bank of Ceylon, Merchant Bank of Sri Lanka, Carson Cumberbatch, HSBC Global Asset Management and Sri Lanka Insurance, she said.

UTI Mutual Fund has demonstrated tremendous resilience and a unique ability to accept change. This proactive stance has led to the organisation being voted India’s most preferred mutual fund in the whole of India.

She said that in line with the evolving global trend and also to allow the mutual fund products to be professionally managed by a management the team focused sharply on the core business of Mutual fund.

Meanwhile, Ceybank Unit Trust Funds will launch a money market fund for the public soon.

The current high interest rates in the country prompted them to launch this money market fund for the public. Therefore, they are keen on collecting Rs. one billion before April, she said.

Wickramasinghe also said that once they collect the funds from the public they would reinvest it in Treasury Bills, bonds and commercial papers to yield a higher return for their customers/investors.

She said that all Unit Trusts being based on securities, which trade in fluctuating markets, there can be ups and down in the medium to long term which has been more an upward trend beating inflation and bank savings interest rates.

Currently, Unit trusts manages mainly two funds in the country. They also manage Sri Lanka’s largest unit trust fund valued around Rs 2.2 billion and also the biggest Equity Unit Trust Fund (Ceybank Century Growth Fund). The Bank of Ceylon is the main trustee of the bank, she said.

She also said that everything operated through the Bank of Ceylon branch network and the main advantages of investing in Unit are tax free in annual dividend payments, tax free in capital gains and easy encashability and access to professional investment managers.