Rs. 15 Billion foerign inflow by 31st March 2012

Mr. Cabral was very optimistic in January that huge foreign inflows will materialize by March. Now we are in March. I don't have the exact amount of net inflow by now. But I think it's now exceeding Rs.3 billion and exactly the half of the month gone. But no deals yet.

But lot of stories are circulating, some of them are seem to be credible.

1. JKH and CFIN should shed their holdings in NTB and the stake at sale is 20% of NTB's issued number of shares. JKH's average cost per share in NTB is Rs.22.60. Even at current prices they will book a capital gain of Rs.33/- per share. Around Rs.1.1 billion. In a negative market JKH has gone up by 15% during last two and half months. Further we saw lot of activity in recent days. Most probably transaction date is very near. If the buyer is a foreign party, this will bring in about 2.5-3billion inflow at current prices doubling the net inflow to 6billion for the current year.

2. If JKH book this capital gain before 31st march, this will be a historical year for JKH, Biggest ever net profit as they have shown tremendous growth in leisure business in last quarter. As Rupee has depreciated by more than 10% during this period, for a foreign party JKH is attractive at even Rs.200/-. A window is open for long standing institutional shareholders to exit and re-aligned their portfolios. JKH also in need of a cash rich foreign investor, who will not oppose for a rights issue, opening the doors for their mega property development plans. Will DIST shed JKH and concentrate on Aitken Spence or someone else will exit? Other possibilities EPF, SLIC, Captains, Guardian.

If no. 2 materializes it will add lot of liquidity to the market. Will this change happen?


Government is badly in need of foerign currency. It's quite logical to assume that they will do the maximum to promote these stakes to foerign parties.

Only hope Gov institutions will not buy the stakes.

“Today the demand is for super luxury vehicles, which is not entirely a plus point for the country. High fuel consuming vehicles need to be hit. There is a chance for the Government to increase taxes on such high fuel consuming vehicles by 400-500%. This would help the Treasury and they will not be subsidised at the expense of others.”
http://www.ft.lk/2012/03/15/ram-sees-glass-half-full/

Even if you buy 50 million oil wasting metal engine or a 2 million metal engine the purpose is the same just going from A to B. Those super luxury vehicle should be taxed a huge massive extra luxury yearly fee. May be 1/10 of the cost of the vehicle every year. This will prevent people from using the existing old metal engines using as gold. Sad thing is the cost of most of these luxury vehicles used by politicians, central bank, treasury heads, etc, etc, are paid by the fools who are travelling in the buses and trains.

aj wrote:“Today the demand is for super luxury vehicles, which is not entirely a plus point for the country. High fuel consuming vehicles need to be hit. There is a chance for the Government to increase taxes on such high fuel consuming vehicles by 400-500%. This would help the Treasury and they will not be subsidised at the expense of others.”
http://www.ft.lk/2012/03/15/ram-sees-glass-half-full/

Even if you buy 50 million oil wasting metal engine or a 2 million metal engine the purpose is the same just going from A to B. Those super luxury vehicle should be taxed a huge massive extra luxury yearly fee. May be 1/10 of the cost of the vehicle every year. This will prevent people from using the existing old metal engines using as gold. Sad thing is the cost of most of these luxury vehicles used by politicians, central bank, treasury heads, etc, etc, are paid by the fools who are travelling in the buses and trains.

Agreed

Will government funds sell their quantities of JKH to a foreign Buyer?
Then There will be that required balance 12Bn foreign inflows on the cards.

slstock wrote:Only hope Gov institutions will not buy the stakes.

NTB is one of the few bank still govt didn't touch. However, in hidden govt has invested via DFCC, holds around 10% shares of NTB

Why JKH needs to sell NTB shares ?
NTB is owned to a well diversified holding company but no one hold controlling interest.

sapumal wrote:Why JKH needs to sell NTB shares ?
NTB is owned to a well diversified holding company but no one hold controlling interest.

There is an issue of holding more than 15% of banks by one other company. It is a central bank directive.

slstock wrote:

sapumal wrote:Why JKH needs to sell NTB shares ?
NTB is owned to a well diversified holding company but no one hold controlling interest.

There is an issue of holding more than 15% of banks by one other company. It is a central bank directive.

CBSL rule on ownership of a bank....

(f) No company, incorporated body or individual can hold more than a percentage of the issued share capital of the company as determined by the Monetary Board. (At present, the limit has been determined as 15% of the issued share capital carrying voting rights in a bank.) Further, any person or nominee of such person, partnership, company or corporation cannot acquire more than 10 per cent of the issued share capital of an LCB without the approval of the Monetary Board, given with the concurrence of the Minister of Finance.

(g) No company, together with its subsidiaries, its holding company etc. can hold more than a percentage of the share capital of the company as determined by the Monetary Board. (At present, the limit has been determined as 15% of the issued share capital carrying voting rights in a bank.)

(h) No individual, together with his close relations and companies in which he has a substantial interest, can hold more than a percentage of the issued share capital as determined by the Monetary Board. (At present, the limit has been determined as 15% of the issued share capital carrying voting rights in a bank.)

may NTB Buy by KDD Perara at Rs 65.00

Billions or Millions?

"Mr. Cabral was very optimistic in January that huge foreign inflows will materialize by March. Now we are in March. I don't have the exact amount of net inflow by now. But I think it's now exceeding Rs.3 billion and exactly the half of the month gone. But no deals yet."

During March 2012, CBSL issued USD45mn worth Sri Lanka Development bonds that covers at least LKR5.4bn of the LKR15bn.

http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=47287

Not to worry he may show some account for his LKR15bn estimate by March 2012

ohh big buying today,turnover still below 300m

Sri lanka has to repay US $ 500 For sovereign bonds which the maturity period is due in mid 2012,

thanks greedy and slstock
I thought that rule is not applicable, if the holding company is not a controllable by one person

11 days for trading in March....

To become real this statement ... Average 1.2 billion per day net foreign net inflow to be happen....

what happen within if foreign inflow 12 billion to cse?

What I heard is EPF is gonna sell its jkh stake to a foreign fund. Its rumoured to be a malaysian based fund called Khazanah Nasional . It would result in a foreign inflow of around 14 billion. Also the funds released to the EPF after the sale is expected to be re invested in the market.

If this happens it would almost nullify the net foreign outflow of 19.1 billion last year.

Trend wrote:What I heard is EPF is gonna sell its jkh stake to a foreign fund. Its rumoured to be a malaysian based fund called Khazanah Nasional . It would result in a foreign inflow of around 14 billion. Also the funds released to the EPF after the sale is expected to be re invested in the market.

If this happens it would almost nullify the net foreign outflow of 19.1 billion last year.

Hope this will happen. So EPF will reinvest thus market demand increase and indices go up.

Rajaraam wrote:

Trend wrote:What I heard is EPF is gonna sell its jkh stake to a foreign fund. Its rumoured to be a malaysian based fund called Khazanah Nasional . It would result in a foreign inflow of around 14 billion. Also the funds released to the EPF after the sale is expected to be re invested in the market.

If this happens it would almost nullify the net foreign outflow of 19.1 billion last year.

Hope this will happen. So EPF will reinvest thus market demand increase and indices go up.

Good value share price will go up does not mean index need to go up steeply.
Our investment not based on index.
Index after all yard stick to the econmists.
Concentrate to invest in good value share is need of this hour.

Rajaraam wrote:

Trend wrote:What I heard is EPF is gonna sell its jkh stake to a foreign fund. Its rumoured to be a malaysian based fund called Khazanah Nasional . It would result in a foreign inflow of around 14 billion. Also the funds released to the EPF after the sale is expected to be re invested in the market.

If this happens it would almost nullify the net foreign outflow of 19.1 billion last year.

Hope this will happen. So EPF will reinvest thus market demand increase and indices go up.

I assume it can happen. Recently EPF sold SPEN to a foreign fund to bring much needed dollar inflow.

Code:

Among sellers last Monday were Employee Provident Fund (EPF), A Z Holdings, Elgin Investments and Abbas Esufally.
Market talk was that EPF, which sold around 1.2 million shares, had maintained a stance that if it was selling, it would only be to foreign funds – a move to bring in much-needed dollar inflows.

Source: http://www.ft.lk/2012/03/12/others-secure-harry-misses-in-scramble-for-spence-shares

I also heard that from a very reliable source... EPF is selling to foreign funds... And the market will pick up as expected...

Trend wrote:What I heard is EPF is gonna sell its jkh stake to a foreign fund. Its rumoured to be a malaysian based fund called Khazanah Nasional . It would result in a foreign inflow of around 14 billion. Also the funds released to the EPF after the sale is expected to be re invested in the market.

If this happens it would almost nullify the net foreign outflow of 19.1 billion last year.

Then this might be the Inflow that Mr. Ajith Cabral has hinted in March, as EPF is under central bank regulation hi must know what is going to happen. JKH market price also picked up last couple of weeks.
Via this deal Gov can kill 2 birds from 1 stone.

1. Foreign currency inflow
2. Bail out package for CSE ,Which will be a good deal for EPF as well, since stocks are cheaper now. Hope it will not be like LGL deal at 48/- and many other rotten deals like TESS,BLUE executed by Government related funds.

Redbulls wrote:

Rajaraam wrote:

Trend wrote:What I heard is EPF is gonna sell its jkh stake to a foreign fund. Its rumoured to be a malaysian based fund called Khazanah Nasional . It would result in a foreign inflow of around 14 billion. Also the funds released to the EPF after the sale is expected to be re invested in the market.

If this happens it would almost nullify the net foreign outflow of 19.1 billion last year.

Hope this will happen. So EPF will reinvest thus market demand increase and indices go up.

Good value share price will go up does not mean index need to go up steeply.
Our investment not based on index.
Index after all yard stick to the econmists.
Concentrate to invest in good value share is need of this hour.

But yard stick is important coz most ppl meassure success with that.

31/03/2005 EPF had 6.3 million SPEN shares.
31/12/2010 EPF had 14.5 million SPEN shares
since 30/06/2011 EPF holds nearly 30.0 million SPEN shares

EPF had bought majority of their SPEN shares over the current market price.

So what's the catch of this sellings?

However 6.3 million shares (before 31/03/2005) must cost them next to nothing.

your statement regarding 15 billion foreign inflow at 31 march is now going to be correct
thanks for sharing your ideas.