Sri Lanka Stock Picks

Sri Lanka stock picks site has been developed to give first hand information with regard to share trading opportunities available for investors who do not like go through lengthy research reports, calculations,etc but to have a clear idea about stocks that have future up side potential.Our service is just not for day traders but for the investors who wish to see their money growing in the long run.Our main objective is to provide information relating to trading under one roof.

Saturday, March 13, 2010

SRI LANKA - COLOMBO INVESTMENT TRUST PLC (CIT) THE CROWN JEWEL OF CFLB

SRI LANKA EQUITY ANALYTICS

Colombo Fort Land and Building PLC (CFLB)

Colombo Fort Land and Building Company PLC (CFLB) is a fully diversified conglomerate with interest in many sectors. The CFLB group through it complex structure own and control many companies including its flagship listed companies Lankem Ceylon PLC, EB Creasy and Company PLC, Muller & Phipps (Ceylon) PLC, Colonial Motors PLC, York Arcade Holdings PLC, Kotagala Plantations PLC, Agrapathana Planations PLC, Sigiri Village Hotels PLC, Maravilla Resorts PLC.

Group Structure of CFLB & CIT

Shareholdings of CFLB

As per the above shareholdings of CFLB the Colombo Investments Trust PLC (CIT) and Colombo Fort Investment PLC (CFI) owns 13.74% (4,947,517 shares) and 10.81% (3,890,076 shares) of CFLB respectively. Further in addition the above direct holdings in CFLB, there is a clear cross holdings between the two companies CIT and CFI. CIT owns 31.69% (1,584,571 shares) of CIT whereas CFI owns 12.95% (732,402 shares) of CIT.

The Top 20 shareholders of CFLB as at 31^st December 2009 are as follows;

Net Asset Value (NAV) of Colombo Investment Trust PLC

Importance of CIT to CFLB Shareholders

Majority shareholdings in CFLB is vested between three unlisted companies namely Property Investments holdings Limited, Capital Investments Limited and Financial Trusts Limited. Jointly these three companies control approximately 33.10% and Mr Senthirajah the Chairman of CFLB directly owns approximately 6.22% shareholdings. The two Investment Trusts CFI and CIT approximately control 24.5% of CFLB and further 17.17% is held by the Public (Outside top 20 shareholders).

As seen from the above shareholdings of CFLB it is crucial for the majority shareholders to be in firm control of CIT& CFI. The control CFI can be achieved with the control of CIT as the latter owns approximately 31.69% of CFI. Therefore control of CIT is the most significant to the control of CFLB.

Who controls Colombo Investment Trust PLC (CIT) ?

It is important to disregard the CFLB's and CFI ownership in CIT when considering the ownership of CIT as shareholders cannot control CFLB and CFI without the control of CIT.

Majority of shares of CIT is presently owned by two unlisted companies namely Financial Trust Limited, Property and Investment Holdings Limited. Jointly theses two companies control approximately 49.87%. This was as result of Financial Trust Limited increasing its shareholdings from 32% to current 35% during latter part of FY 2009.

Therefore we could determine that the shareholdings of Financial Trust Limited is the key to the control of CFLB. Financial Trust Limited is an unlisted company and the shareholdings are not available to the public. In the event if the control of Financial Trust Limited becomes unclear due some unforeseen reason then most important company within the CFLB group undoubtedly is the CIT. Therefore one could consider Colombo Investment Trust PLC (CIT) to be the Crown Jewel of the CFLB group.