Saturday, January 23, 2010


SECTOR                          -     BANKING & FINANCE  

MARKET P.E. RATIO       -     17.23                                                             

SECTOR P.E. RATIO       -     10.60 

SHARE PRICE                -     RS 17.00

Lanka ventures plc was originally owned by DFCC & HNB two leading banks in Sri lanka. However owner ship of the Lanka ventures changed last week where it was purchased by ACUITY PARTNERS a joint venture between two giant banks  in Sri lanka once again its DFCC & HNB. ( 50% each owned by  them.) The purchased price was @ Rs 18/- per share. This transaction by ACUITY PARTNERS results in a mandatory offer for the remaining shares of LVEN @ Rs 18/-share.

The following are the  subsidiaries of Acuity partners - 
  •  Acuity Stock Brokers (pvt) ltd 
  •  Acuity Securities (pvt) ltd           
Acuity partners now owns 78.31 % of the issued & paid up Ordinary Share Capital of Lanka Venture PLC.                       

The principal activity of the company is to provide financial assistance through equity /equity related instruments for the companies that have future growth prospects.They have significant investments in the areas of health care & hydro power generation presently. Lanka ventures investments to those two areas represents  more than 80% of its total portfolio.

Lanka ventures reported a profit of Rs 52 m.n. as  against a loss of Rs 93 m.n YOY as at 30/09/2009. There current assets position was Rs 231 m.n. & current liabilities were Rs 346,000 as at 30/09/2009. Net assets per share was Rs 14.85 as at 30/09/2009.

The stated capital of LVEN is comprises of 50 m.n. ordinary shares. 

It has a tract record of paying high dividends in the past except for the financial year 2008 where the company has to faced for a tax problem which resulted an out flow of over Rs 100 m.n. Still they have not declared any dividends for the financial year 2009 which ends 31/03.2010. Hence we can expect a cash payment by way of a dividend in near future on back of their improved performances.

During the past couple of months LVEN clearly under performed to the market.

Further we expect LVEN to perform better in the future with new opportunities available in the country after the end of 30 year old civil war.There main income generates from the following areas,
  • Dividend income from investments.
  • Investment securities.
  • Sale of investments. 
The low interest rates scenario in the country is a negative factor to the company at present. 

There for we believe that the investors are in a position to get a guaranteed return (This is the minimum return) as mentioned below from  investing in the company shares & by accepting  the mandatory offer by ACUITY PARTNERS @ Rs 18/- without waiting for long term returns if necessary or can wait for above average return in future.

(Please note that the trading price of Lven share was @ Rs 17/- & the closing price was also @ Rs 17 on 22/01/2010.) 
We believe that LVEN is a good share to invest in the event of any price drop in the future.



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