Collectively Foreign Institutional Investors (FII’s) were net sellers accounting for US $ 1.3 billion in debt and US $ 34 million in equity in year 2015 putting significant selling pressure on capital market and currency during the year, Sri Lanka’s leading investment banker – Namal Asset Management Chairman and Union Bank Deputy Chairman Alex Lovell points out in the latest annual review of Namal Acuity Value Fund.
He stresses that domestic political and market environment ampli¬fied the volatile market conditions with the electoral cycle and change of government resulting in a new policy direction.
“As a result, ASPI fell 10.9% while the Rupee depreciated 9.2% % during the period under review” Lovell highlights adding that all equity funds managed by NAMAL outperformed the broader markets with National Equity Fund (NEF) and NAMAL Growth Funds (NGF) recording negative growth of 7.2% and 9.1% respectively, during the period under review.
According to him despite adverse market conditions, Namal Equity Funds had now delivered 13.8% compounded annualized return to investors in its 24 years of existence, which is a benchmark set by NAMAL for the unit trust industry. NAMAL Fi¬xed income funds too have provided attractive tax adjusted returns despite the challenging low interest rate environment during the year. NAMAL High Yield Fund reported a return of 10.03% while NAMAL Money Market Fund reported a return of 8.31% during year.
In his annual review Lovell goes on to explain that the year ahead will continue to be challenging with slower global economic recovery and volatile external environment in addition to challenges stemming from domestic political and macro-economic issues. However, the Asset Management group is optimistic about the long term growth prospects of the Sri Lankan economy and its capital markets.