Guardian Acuity Equity Fund outperforms ASI three years in a row

The Guardian Acuity Equity Fund has appreciated 37.89% for the year 2014, beating the ASI which rose by 23.44% during the same period, by amargin of 61.65%, the fund’s managers said on Friday.

"The fund, which has been in operation since February 2012, has appreciated by 67.4% during that period, whereas the All Share Index in the same period increased by 33.28%. The more sensitive S&P SL 20 stock index, which is a gauge of the most liquid stocks of the Colombo Stock Exchange, gained 38.35% during the same three years. The investment scheme which is an open ended, continues to attract investors both institutional and retail who are impressed with the sustained performance of the fund," a news release said.

The Guardian Equity Fund is managed by Guardian Acuity Asset Management Limited (GAAM), which is a joint venture between Acuity Partners (Pvt) Ltd and Ceylon Guardian Investment Trust PLC. Ceylon Guardian Investment Trust PLC manages over Rs. 33 billion in assets and is a listed subsidiary of the diversified conglomerate Carson Cumberbatch PLC. Acuity Partners (Pvt) Ltd is the joint venture Investment Bank promoted by banking giants Hatton National Bank PLC and DFCC Bank PLC. .

Ruvini Fernando, CEO of Guardian Fund Management Limited said "Investors in the funds have benefited from our ability to identify stocks that have strong potential to outperform the broader market even in times of volatility. We have a qualified and experienced in-house research arm, and, we also benefit from the research provided to us by some of the best stockbrokers. Further, we have a wide reach and long experience in managing money for our clients, which enable us to identify emerging trends and beat the curve."

"Investors who are willing to stay in invested in the long run are the ones who have truly benefited from these high returns" said Sumith Perera, the fund manager in charge of the unit trust. "Our equity fund is ideal for busy professionals and entrepreneurs who don’t have the time to monitor the stock market on an hourly basis. While they watch their business which is their expertise, we manage their money which is our expertise. When selecting a fund we also advise investors to check consistency of track record of the manager and experience in the industry, and not get too carried away by a short term burst of good performance," he further stated.

Mohandas Thangarajah, General Manager of GAAM added "The performance of the fund is proof that the scientific approach to investment beats all other methods. We have kept the entry point at Rs 1.000 and the management fees low to attract the masses to the market. It is usually the small investor who gets burned by bad advice, bad timing and inability to diversify; In the GAAM Equity Fund we have provided a solution to all those problems. The fact that our assets under management has grown by over 259% in 2014 is evidence of our consistent performance."

GAAM also manages Guardian Acuity Fixed Income Fund which has returned 8.51% tax free return in 2014, and a 34.01% return since 2012. The Income Fund invests in short term money market products thereby reducing risks associated with wide swings in the interest rate market and mark-to-market losses. It is the preferred investment vehicle for those who seek steady growth in the long run.

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Port City project to be reviewed by new govt.

EconomyNext - Sri Lanka’s new government will review a 1.3 billion US dollar Chinese-funded and built reclamation project next to its main port on security and sovereignty concerns, Investment Promotion and Highways Minister Kabir Hashim said Friday.

"The port city project has to be reviewed completely because we’ve always spoken about security concerns," he told reporters soon after assuming office following the opposition’s win in last week’s presidential polls. 

"We cannot have land given on freehold basis to another country in a high security zone," said Hashim referring to the controversial project to reclaim land next to Colombo port.

Hashim is Chairman and General Secretary of the United National Party whose leader Ranil Wickremesinghe was appointed Prime Minister after last week presidential poll in which strongman Mahinda Rajapaksa was ousted.

The opposition was critical of the project during the election campaign saying it lacked transparency.

"There’s been an absolute lack of transparency there," Hashim said, adding that the Sri Lanka Ports Authority (SLPA), which is implementing the reclamation project, had no right to do so.

"The implementing authority is the Ports Authority," Hashim said. "Rightly speaking the Ports Authority does not have the mandate to do that. It should have gone through the Ministry of Finance. It should have come through the correct process.

"The Ports Authority is an authority. It has no right to get involved in a multi-complex project. Its mandate is to deal with ports and shipping.

"But this is nothing to do with ports and shipping. It’s about development of housing complexes," Hashim said referring to port city project plan to build hotels and office blocks.

The project will be put before the new Cabinet, Hashim said.

"Our greatest concern is that it affects our sovereignty. If it’s changing the coastline, it should be done properly with the full awareness and acceptance of everyone in the country."
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Part of power project IPO funds diverted to property company

FLC Holdings PLC Friday disclosed in a Stock Exchange filing that it was utilizing a sum of Rs. 225 million of the proceeds of an Initial Public Offering (IPO) of Rs. 600 million initially allocated for two mini hydropower projects to purchase 22.5 million shares in a wholly owned subsidiary, FLC Properties (Pvt) Ltd., at Rs. 10 a share.

The filing said that FLC Holdings MD/CEO had said in his review in the company’s annual report for 2013/14 that Dolekanda Power (Pvt) Ltd. could not obtain energy permits from the Sustainable Energy Authority for its two mini hydropower projects Rakwana 1 and Rakwana 2 which the IPO prospectus said had a total energy capacity of three MW.

This was due to a dispute with regard to the resource allocation. The proportionate allocation of funds for these two projects, out of the total of Rs. 600 million raised on the IPO was Rs. 225 million.

At present the unutilized IPO funds have been invested in short-term deposits at financial institutions by FLC holdings earning interest income ranging from 4.20% to 7% per annum subject to a 10% withholding tax, the filing said.

It further said that FLC Properties had been able to lease all floors of FLC Tower at No. 19, Dudley Senanayake Mawatha, Colombo-8 after additional car parking facilities had been provided to tenants at a separate 33.75 perch land purchased for Rs. 113.4 million at Sumner Place, Borella.

The capital infusion of Rs. 225 million to FLC Properties by the purchase of its shares by FLC Holdings would save the former company 11% interest it was incurring and also avoid corporate tax on the income of a temporary inter-company loan at 28% to FLC Holdings.

With this infusion of equity funds, the board of FLC Properties is confident of recording profits for the year 2015/16 and paying dividends to FLC Holdings, its only shareholder, the filing said.
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Govt. to reconsider $ 1.4 b port city project on security concerns – Kabir

By Uditha Jayasinghe
Sri Lanka’s new Government will reconsider a $ 1.4 billion Chinese-funded port city project in the capital, newly appointed Highways and Investment Minister Kabir Hashim said yesterday.

China Communications Construction Company (CCCC) subsidiary China Harbour Engineering Company is creating the new island off Colombo’s harbour, which was started during former President Mahinda Rajapaksa’s tenure.

However, last Thursday elections saw the removal of Rajapaksa and the appointment of new President Maithripala Sirisena.

Sirisena also appointed a new 27-member Cabinet headed by Prime Minister Ranil Wickremesinghe who had earlier warned the port city would be scrapped if it failed to meet environmental standards.

“The port city project has to be completely looked at. We have always spoken about security concerns. You cannot have land given on freehold basis to another country in a high security zone,” Hashim told reporters after assuming duties.

Under the agreement the Chinese company will own 108 hectares from the total 233 hectare land area.

“There is lack of transparency. The implementing authority is the port authority, which does not have the mandate to do that. It should have gone through the Ministry of Finance,” charged Hashim.

“Ports Authority does not have the right to get involved in multi-complex project. This is nothing to do with port and shipping. It is not their mandate.”

According to the Cabinet paper approved in November 2013 the Sri Lankan Government will receive the remaining acres, which will be used to attract investors.

“When you sell a land or give outright grant in a high security zone, it is a problem. This is a project that changes the country’s shape in the world map. So if you are doing such project there should be transparency and consensus among the people.”

Known to be the single largest investment project in Sri Lanka, the port city will also have Sri Lanka’s first 100-story skyscraper under Phase II of its work. This phase would include the construction of hotels, shopping malls, a golf course as well as a F1 track.

The Sri Lankan Government expects to attract investment exceeding $ 5 billion once the port city is completed.

However, Prime Minister Wickremesinghe during a meeting with the Chinese ambassador to Sri Lanka has assured the project would go ahead once environmental concerns are addressed, according to the Chinese embassy.
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