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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » CDB perfomance for the last quarter.

CDB perfomance for the last quarter.

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21CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Mon Feb 18, 2013 11:21 am

seek


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@The Alchemist wrote:quote "I think he was a active member(AROUND 15 MONTHS BACK) in the past and now back in another ID." Unquote

@ Redbulls - Interesting observation. Btw does current and former ID both start with the same two letters of the alphabet ?

Only name I can recall is rajitha but definitely rainmaker should not be rajitha.

22CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Mon Feb 18, 2013 11:47 am

Redbulls


Director - Equity Analytics
Director - Equity Analytics
@seek wrote:
@The Alchemist wrote:quote "I think he was a active member(AROUND 15 MONTHS BACK) in the past and now back in another ID." Unquote

@ Redbulls - Interesting observation. Btw does current and former ID both start with the same two letters of the alphabet ?

Only name I can recall is rajitha but definitely rainmaker should not be rajitha.

You are correct.

23CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Mon Feb 18, 2013 11:56 am

rainmaker


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I haven't used this forum before. I just registered to get rid of that annoying pop up message.

Also I personally prefer fixed income trading to equity trading.

24CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Wed Feb 20, 2013 11:03 pm

lion


Senior Equity Analytic
Senior Equity Analytic
Hi Rain,
I wanted to attempt to answer your questions on Monday, but got some urgent work to attend. I will try to answer some of your questions, others in the forum can also help.. I mainly see that you are trying yo ask qualitative questions mixing with numbers.

Who is the CDB's long term funding solution?
As with any financial institution, the main source of funding is public deposits followed by borrowings and the equity, please refer the page 32, of the Annual report. The deposit base has grown by 52% to 11.2 Bn in 2012.
http://cse.lk/cmt/upload_report_file/981_1339070344429.pdf

Why did the CINS directors resign? Why doesn't CINS divest its stake in CDB? Why doesn't CDB divest it's stake in CINS?

I would not be able to answer these questions as I do not sit in the neither Boards, but the thing to note is both CINS.N and CDB are solid counters and there is no need to dispose such investments right now for both parties.

What's the deal with the related party deposits and debentures?
please refer the 2011 AR page 134, where the yields of the debentures are disclosed. (250 Mn 5 year unsubordinated, unsecured debenture was issued at 12.5% in 2011) considering the present yields this is can be viewed as a wise decision by CDB.
http://cse.lk/cmt/upload_report_file/981_1307704503640.pdf

The deposits from CINS is only 68 MN which is immaterial to the deposit base. Also the maximum interest rates applicable is TBILL rates plus 3%. Further the Board must approve any related party transaction above 50,000.00 as per CBSL directive.

There is a fundamental bond between CINS and CDB. Otherwise why doesn't CDB dispose its shares in CINS for 600M/= (25% of its market cap and probably a big part of its shareholder equity)

Yes there is, the company was part of the former Ceylinco Group and CINS is a shareholder from the beginning.

Most importantly, can CDB survive on its own - is its portfolio self financing?
As explained above there is not evidence that suggests that the performance of CDB is reliant on CINS.
The deposit and borrowings are the core funding sources.

At what point will the leasing profits payback operational expenses?
This question is not very clear, interest income is recognized over the life of the contract, ex four years. operating expenses are revenue nature and does not pay pack, typically returns are earned from assets employed. If the interest income is sufficient to cover the operating and other expenses the company will make profits (like in the present situation).

There can be minor issues such as resignation of reputed directors; CINS does not control CDB so why should the CINS Director be the Chairman of CDB.

25CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Thu Feb 21, 2013 5:00 pm

rainmaker


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Lion I'll answer you tomorrow when I'm free.

26CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Fri Feb 22, 2013 12:15 pm

rainmaker


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Lion,

I didn't give a buy/sell recommendation on CDB. I was just answering the question with regards to "other liabilities" Very Happy
Note that the below also applies to other banks and finance businesses.

I suggest you read a credit report on how to analyse these sorts of companies.

Funding can come from 1) debentures 2) FD with more than 1 year 3) FD less than 1 year 4) savings accounts

Also it is important to see how much the top 20 depositors have in total proportion to total assets. Even in a bank like People's the top 20 have 10% of total assets.

http://www.peoplesbank.lk/downloads/financial/2010/fitch2010.pdf


With regards to your other questions, CINS has made numerous loans, to this entity in the past. If the debt was kept the situation would be a lot different. In 2008-2009 CINS and other unlisted businesses wrote off a lot of these debts. This was before the IPO.

You seem to be unaware of the CINS rumours.

27CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Fri Feb 22, 2013 1:09 pm

Harry82

Harry82
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I think rainmaker has a problem with CDB's Management Team. Boz
There are lots of finance companies listed at cse. There prices are going above 15 times - 200 times (PER). Eg: GSF,Nation Lanka,SFS,TFC,...........
Then why you specially tell about CDB??
(CDB is one of the top 10 Finance Company)



Last edited by Harry82 on Fri Feb 22, 2013 1:12 pm; edited 1 time in total (Reason for editing : little mistake)

28CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Fri Feb 22, 2013 1:15 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
Hmm, I hate to say this, but during low volume days like this, the comments on the forum Apprears to have soem effect.

Oneday I saw MPRH go up after some comments and now CDB came down . Interesting. Theory to be proved further ( not confirmed)

29CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Fri Feb 22, 2013 1:30 pm

rainmaker


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I have nothing against CDB or their management. But I do agree if you want to invest in finance company CDB is not a bad choice these days-> better than CIFL or TFC.

CIFL has invested their deposits on real estate like TFC. That worked in 2000s but not anymore.

At least CDB invested in a lending portfolio. CDB's positives and negatives are from the Ram's report which is on their website. I know none of you read this before you buy shares.

30CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Fri Feb 22, 2013 1:36 pm

Harry82

Harry82
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
What do you say about GSF?
(EPS =Rs 1.5 , Assets = 15.97
Price =Rs 650

31CDB perfomance for the last quarter. - Page 2 Empty Re: CDB perfomance for the last quarter. Fri Feb 22, 2013 3:03 pm

The Alchemist


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@ Rainmaker - Please pardon me for being blunt, but not surprisingly, your comments on this post re CDB, lack clarity & purpose, are vague & adhoc, lack facts and figures and most importantly lack a central theme and argument.
In your early post on this thread, it appeared your contention that CDB had many issues. later your position was its a valuable firm and doing incredibly well.
Correct me if i'm wrong but your two main contentious issues is 1 ) the inter-relationship to CINS - which i consider a advantage actually and 2) their long term funding source - Deposits and CINS.
Actually the Insurance business and Finance (leasing) business are very complementary and a win win for both parties. Insurance companies have large Floats (Premium Income + Life Fund). These are generally invested in a diversified portfolio of assets / instruments across differing maturities. For CDB to have access to this pool is a bonus i feel. Actually it is CINS that is taking the risks by investing in their subsidiary CDB (Debentures).
I feel Lion and Harry have adequately addressed you concerns which also keep varying, from post to post !

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