With CTCE Deal geeting closee --How about NDB ?

sanju351 · 1 With CTCE Deal geeting closee --How about NDB ? Mon Sep 24, 2012 10:50 pm

sanju351

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Hey

Experts and seniors ..as expected NDB will gain a huge Financial gain if the deal goes around 400 -500 ..

NDB still trading at 140 Lvels ...is this price good to get in to the Bus ?

Experenced Guys please share your ideas ...

malanp · 2 Re: With CTCE Deal geeting closee --How about NDB ? Mon Sep 24, 2012 11:36 pm

malanp

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sanju351 wrote:Hey

Experts and seniors ..as expected NDB will gain a huge Financial gain if the deal goes around 400 -500 ..

NDB still trading at 140 Lvels ...is this price good to get in to the Bus ?

Experenced Guys please share your ideas ...

I sold 90% my portfolio and bought NDB today. 134-138 levels. I expect NDB will go to 300 level with 4-5b capital gain.

Any way NDB is a good share, so for me there is nothing to lose.

Papillons · 3 Re: With CTCE Deal geeting closee --How about NDB ? Tue Sep 25, 2012 8:49 am

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Assumption: The buyer values CTCE at Rs.380 per share (3.4x book value)

CTCE value 380
CTCE total no. of shares 30,000,000
CTCE value 11,400,000,000

Aviva NDB Finance stake in CTCE 87.3%
Value of Aviva NDB Finance 9,952,200,000
Stake held by CDIC in Aviva NDB Finance 41.6%
Value of the stake 4,136,134,320
Cost of the investment in CDIC books 1,410,575,000
Capital gain for CDIC 2,725,559,320

% held directly by CDIC 5%
Cost of investment 304,500,000
Value of investment 570,000,000
Capital gain for CDIC 265,500,000

Total capital gain for CDIC 2,991,059,320
No. of shares in CDIC 43,855,007
Capital gain per share for CDIC 68.20

% held by NDB in CDIC 99.7%
Total capital gain for NDB 2,982,086,142
No. of shares in NDB 164,201,902
Capital gain per share for NDB 18.16

Hope this is helpful!! Very Happy

dineshfernando · 4 Re: With CTCE Deal geeting closee --How about NDB ? Tue Sep 25, 2012 9:27 am

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NDB is presently trading at a PE of 8.62 times. (138/16).

I think it's fairly valued.

I'm interested about the gain if the deal goes through.

Papillions, you mean we get a capital gain of Rs. 18.16 for each NDB share? So the price may increase by this amount eventually.

Papillons · 5 Re: With CTCE Deal geeting closee --How about NDB ? Tue Sep 25, 2012 9:40 am

Papillons

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dineshfernando wrote:NDB is presently trading at a PE of 8.62 times. (138/16).

I think it's fairly valued.

I'm interested about the gain if the deal goes through.

Papillions, you mean we get a capital gain of Rs. 18.16 for each NDB share? So the price may increase by this amount eventually.

NDB 12m trailing EPS is Rs.18.7

So at a price of Rs.140, PE is 7.5x. The sector PE is 8.7x

NDB book value per share is Rs.108.5

So at a price of Rs.140, PBV is 1.3x. The sector PE is 1.6x

Even without the deal, NDB has potential for price appreciation. Very Happy

UKboy · 6 Re: With CTCE Deal geeting closee --How about NDB ? Tue Sep 25, 2012 11:30 am

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Retailers alone cannot push NDB.
There are some counters @ CSE do not move as you wish no matter how good their financial reports are.
NDB is always in that category.

WildBear · 7 Re: With CTCE Deal geeting closee --How about NDB ? Tue Sep 25, 2012 12:42 pm

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NDB had a lethargic management over the years and that's why it is not appreciated much, but now things seems to have changed with the new board appointed in last year.
CTCE didn't give much return to NDB, as insurance business is not a very lucrative in Sri Lanka.
I think if they dispose CTCE, they are in a better position with a huge capital gain and can concentrating more on their core business.

NDB free floating is not that much high, and trading at a very low P/E, I also think this event can drive NDB and CDIC in to new heights with both fundamental reason and speculation.

Remember, in 2011 DFCC disposed a stake of COMB and gave a Rs 10 dividend for share holders, We can expect similar things in this case and that is the speculation.

P.S. NDB gave a dividend of Rs 9 per share last year without one off capital gains.