Who is the fool in JKH Transaction ?Buyer or seller

sriranga wrote:If you see the below table EPF gained minimum 1 billion on this transaction.

Simple way to look at it in this way....

Average Investment cost ==========> LKR10bn
Average investment Period =========> 2 years
Gain as per Mr.Cabraal ============> LKR800mn

Return on investment =============> 800mn/10bn

That means 8% return for two years & that brings 4% return per annum.

Wouldn't be better if EPF had invested in Teasury bonds/bills?

greedy wrote:

sriranga wrote:If you see the below table EPF gained minimum 1 billion on this transaction.

Simple way to look at it in this way....

Average Investment cost ==========> LKR10bn
Average investment Period =========> 2 years
Gain as per Mr.Cabraal ============> LKR800mn

Return on investment =============> 800mn/10bn

That means 8% return for two years & that brings 4% return per annum.

Wouldn't be better if EPF had invested in Teasury bonds/bills?

But greedy in that period they got dividends also no?
Again during 2010/2011 averagely most of us failed capital gain in CSE.

what was the commission for Cabral? some one has told it was 1 rupee for share?

Redbulls wrote:

sapumal wrote:This is not a gain to EPF. It is a loss

The deal value is 14.5 bn
Last 5 months rupee was depreciated to 125 from 110 (12%)
If the rupee was there at 110 they will sell @12.76Bn

If they deposited the money Rs 13.5Bn in last November to a USA bank only due to depreciation (12%) they will earn 16.2Bn rupee.
This is a number game.
You can see EPF has a lost due to purchase @ higher price levels

If we consider like this way all of our trades are number game.
We need to consider one currency to calculate our gain or loss.
If your argument make sense for you then another one will come here and compare the loss or gain with Zimbabewe curreny.(May be 1000times profit for EPF)
If we do not want to accept anything good or bad, we try to make comparison to show we are pundits.
This is is typical Srilankan culture?

Your have take a good example but showed it to give a wrong picture

If you buy a land in Zimbabwe for 1Mn Dollars few years ago now it should worth few Billions(say 10). But it's gold based value might have not changed. Even if you got 10bn from that you can't buy things 1000 times than previous

I am not arguing with you. But you should have a common sense about what is the simple meaning of the word devalue. Also the word is not devalue it is 'currency devalue'

sapumal wrote:

Redbulls wrote:

sapumal wrote:This is not a gain to EPF. It is a loss

The deal value is 14.5 bn
Last 5 months rupee was depreciated to 125 from 110 (12%)
If the rupee was there at 110 they will sell @12.76Bn

If they deposited the money Rs 13.5Bn in last November to a USA bank only due to depreciation (12%) they will earn 16.2Bn rupee.
This is a number game.
You can see EPF has a lost due to purchase @ higher price levels

If we consider like this way all of our trades are number game.
We need to consider one currency to calculate our gain or loss.
If your argument make sense for you then another one will come here and compare the loss or gain with Zimbabewe curreny.(May be 1000times profit for EPF)
If we do not want to accept anything good or bad, we try to make comparison to show we are pundits.
This is is typical Srilankan culture?

Your have take a good example but showed it to give a wrong picture

If you buy a land in Zimbabwe for 1Mn Dollars few years ago now it should worth few Billions(say 10). But it's gold based value might have not changed. Even if you got 10bn from that you can't buy things 1000 times than previous

I am not arguing with you. But you should have a common sense about what is the simple meaning of the word devalue. Also the word is not devalue it is 'currency devalue'

Read your post
http://forum.srilankaequity.com/t15906-towards-70-loss#104163

Compare to you EPF is far better on this deal no?

Redbulls wrote:

greedy wrote:

sriranga wrote:If you see the below table EPF gained minimum 1 billion on this transaction.

Simple way to look at it in this way....

Average Investment cost ==========> LKR10bn
Average investment Period =========> 2 years
Gain as per Mr.Cabraal ============> LKR800mn

Return on investment =============> 800mn/10bn

That means 8% return for two years & that brings 4% return per annum.

Wouldn't be better if EPF had invested in Teasury bonds/bills?

But greedy in that period they got dividends also no?
Again during 2010/2011 averagely most of us failed capital gain in CSE.

I agree with dividends (my calculation is an approximate only i.e, average investment period and avergae investment cost)

We can incorporate dividends into the calculation.

Dividend announcements;

16 March 2010 LKR1======> LKR35mn
19 May 2010 LKR1======> LKR35mn
10 November 2010 LKR1===> LKR35mn
11 Feb 2011 LKR1=======> LKR35mn
20 May 2011 LKR1 ======> LKR45mn
03 Novemebr 2011 ======> LKR71mn
15 February 2012 LKR1===> Nil

Approximately LKR256mn Dividend during the two year investment period. Therefore, the total returns become LKR1,056mn.

That means an approximate return of 5% per annum!


During 2010/2011 some investors failed some not. However, didn't we argue when EPF bought shares at higher prices that the investment time horizon for EPF much longer than investors like us?

We need to look at what is the objective of EPF? EPF should be managed to maximise the wealth of contributors to EPF. What is the motive of selling EPF holdings in JKH now? Isn't that we need USD & therefore we sold EPF holdings in JKH?

Conflict of Interest at CBSL.

greedy wrote:

Redbulls wrote:

greedy wrote:

sriranga wrote:If you see the below table EPF gained minimum 1 billion on this transaction.

Simple way to look at it in this way....

Average Investment cost ==========> LKR10bn
Average investment Period =========> 2 years
Gain as per Mr.Cabraal ============> LKR800mn

Return on investment =============> 800mn/10bn

That means 8% return for two years & that brings 4% return per annum.

Wouldn't be better if EPF had invested in Teasury bonds/bills?

But greedy in that period they got dividends also no?
Again during 2010/2011 averagely most of us failed capital gain in CSE.

I agree with dividends (my calculation is an approximate only i.e, average investment period and avergae investment cost)

We can incorporate dividends into the calculation.

Dividend announcements;

16 March 2010 LKR1======> LKR35mn
19 May 2010 LKR1======> LKR35mn
10 November 2010 LKR1===> LKR35mn
11 Feb 2011 LKR1=======> LKR35mn
20 May 2011 LKR1 ======> LKR45mn
03 Novemebr 2011 ======> LKR71mn
15 February 2012 LKR1===> Nil

Approximately LKR256mn Dividend during the two year investment period. Therefore, the total returns become LKR1,056mn.

That means an approximate return of 5% per annum!


During 2010/2011 some investors failed some not. However, didn't we argue when EPF bought shares at higher prices that the investment time horizon for EPF much longer than investors like us?

We need to look at what is the objective of EPF? EPF should be managed to maximise the wealth of contributors to EPF. What is the motive of selling EPF holdings in JKH now? Isn't that we need USD & therefore we sold EPF holdings in JKH?

Conflict of Interest at CBSL.

I totally agree with you their concept in investment is rubbish which all of us know very well.
I do not agree the sale of JKH at this juncture.
But it happened and god sake we didn't get that much of loss.
May be both our intention are same thing but we are viewing from different angle.
Thanks.

Redbulls wrote:

greedy wrote:

Redbulls wrote:

greedy wrote:

sriranga wrote:If you see the below table EPF gained minimum 1 billion on this transaction.

Simple way to look at it in this way....

Average Investment cost ==========> LKR10bn
Average investment Period =========> 2 years
Gain as per Mr.Cabraal ============> LKR800mn

Return on investment =============> 800mn/10bn

That means 8% return for two years & that brings 4% return per annum.

Wouldn't be better if EPF had invested in Teasury bonds/bills?

But greedy in that period they got dividends also no?
Again during 2010/2011 averagely most of us failed capital gain in CSE.

I agree with dividends (my calculation is an approximate only i.e, average investment period and avergae investment cost)

We can incorporate dividends into the calculation.

Dividend announcements;

16 March 2010 LKR1======> LKR35mn
19 May 2010 LKR1======> LKR35mn
10 November 2010 LKR1===> LKR35mn
11 Feb 2011 LKR1=======> LKR35mn
20 May 2011 LKR1 ======> LKR45mn
03 Novemebr 2011 ======> LKR71mn
15 February 2012 LKR1===> Nil

Approximately LKR256mn Dividend during the two year investment period. Therefore, the total returns become LKR1,056mn.

That means an approximate return of 5% per annum!


During 2010/2011 some investors failed some not. However, didn't we argue when EPF bought shares at higher prices that the investment time horizon for EPF much longer than investors like us?

We need to look at what is the objective of EPF? EPF should be managed to maximise the wealth of contributors to EPF. What is the motive of selling EPF holdings in JKH now? Isn't that we need USD & therefore we sold EPF holdings in JKH?

Conflict of Interest at CBSL.

I totally agree with you their concept in investment is rubbish which all of us know very well.
I do not agree the sale of JKH at this juncture.
But it happened and god sake we didn't get that much of loss.
May be both our intention are same thing but we are viewing from different angle.
Thanks.

Yes, not much of a loss... but I believe most of the gain coming from the shares they bought before war....

The gain mainly comes from the EPF's holdings prior to June 2009. If you look at EPF had 6mn (before the share splits after share splits it may have become more than 8mn shares) shares in 30/06/2009. Must have been bought at very low prices may be LKR70 or LKR80. That means the gains from these shares itself well above LKR800mn.

Correct me If I'm wrong.

Redbulls wrote:
Read your post
http://forum.srilankaequity.com/t15906-towards-70-loss#104163

Compare to you EPF is far better on this deal no?

I haven't done any deal. Still it is unrealized. But your point is not relevant
EPF is our money. Government can't use EPF assets and sell cheaply to satisfy political needs and to fulfill personal interests of individuals.

sapumal wrote:

Redbulls wrote:
Read your post
http://forum.srilankaequity.com/t15906-towards-70-loss#104163

Compare to you EPF is far better on this deal no?

I haven't done any deal. Still it is unrealized. But your point is not relevant
EPF is our money. Government can't use EPF assets and sell cheaply to satisfy political needs and to fulfill personal interests of individuals.

I do agree with you on Govt stand.
No hard feeling.

Do you think if Dollar was dropped to 95 (12% appreciation) , will EPF able to sell @194 ?

Shall we please stop arguing on negative aspects, EPF has made some gains, may be not the best possible return. All the times it's not happening. They haven't held the entire quantity all the time. In addition to the final deal in between they have traded on this share.

Big or small they have made a gain something close to 1b. But look at the other positives in the deal.

1. Country got considerable FC, when we needed it most.

2. JKH got a partner who can invest for the long run, and who will support company’s future funding needs.

3. Country has got a boost among foreign investors, as buyer was a very much respected, well managed sovereign wealth fund and the deal was done with more than three months of study by two consultancies, one being a US company.

4. Last but not least, we small investors in CSE should be the happiest group in this deal. As this is a local to foreign deal, market liquidity will improve substantially. EPF has indicated that they hope to invest major part of the proceeds in the local market immediately. But not like earlier, they will be more careful and selective.

Identify the companies that will be targeted by EPF and have some exposure to those. But don’t expect wild price movements in a very short period.

It is disturbing to see how people justify this transaction, like the award winner Abesundara in TV because they think this'll make them earn some money from the stock market. They would do the same if the Channel 4 buys the JKH, saying how good this is and that we should support their campaign. When it's wrong say it's wrong.
This transaction looks like a force selling. The government forcing the EPF, your pension fund, to sell your long term investment to save their asses because of screwed up decisions, limitless expenses and dumb planning and waiting until the end. It's the same as forcing you to sell some of your assets by force and saying hey you didn't atleast made a loss, you earned 10 rupees, here's your 2 rupees.

hariesha wrote:Shall we please stop arguing on negative aspects, EPF has made some gains, may be not the best possible return. All the times it's not happening. They haven't held the entire quantity all the time. In addition to the final deal in between they have traded on this share.

Big or small they have made a gain something close to 1b. But look at the other positives in the deal.

1. Country got considerable FC, when we needed it most.

2. JKH got a partner who can invest for the long run, and who will support company’s future funding needs.

3. Country has got a boost among foreign investors, as buyer was a very much respected, well managed sovereign wealth fund and the deal was done with more than three months of study by two consultancies, one being a US company.

4. Last but not least, we small investors in CSE should be the happiest group in this deal. As this is a local to foreign deal, market liquidity will improve substantially. EPF has indicated that they hope to invest major part of the proceeds in the local market immediately. But not like earlier, they will be more careful and selective.

Identify the companies that will be targeted by EPF and have some exposure to those. But don’t expect wild price movements in a very short period.

You are right, Valid points heriesha, Thank you for your nice analysis.

In any transaction there is a buyer and seller. Both are thinking They won. we know there are instances both buyer and seller won and also loss.

In this situation If EPF sold with the profit considering the time factor they now won. If they sold with loss now and will be able to collect again that lot. Then also they win for the time being.

Code:

[color=green][color=green]Worth to buy.that is undervalued

share[/color][/color]

SL.Market wrote:In any transaction there is a buyer and seller. Both are thinking They won. we know there are instances both buyer and seller won and also loss.

In this situation If EPF sold with the profit considering the time factor they now won. If they sold with loss now and will be able to collect again that lot. Then also they win for the time being.

When you say with a profit, do you know the how much gain EPF made out of the deal? According to one poster's estimate the gain is around 5% per annum. If it's true then that's shameful. You get get almost double from a fixed deposit. Central bank announced it's 800 million or something without saying anything about the percentage. I remember there was a daily news article saying the "Langama" made this much revenue this year without saying the net profit after expenses.

The real problem wasn't the sell decision it seems pretty fine given the market valuation all other factors. The real problem was EPF buying in heavily when JKH was going down.

aj wrote:

SL.Market wrote:In any transaction there is a buyer and seller. Both are thinking They won. we know there are instances both buyer and seller won and also loss.

In this situation If EPF sold with the profit considering the time factor they now won. If they sold with loss now and will be able to collect again that lot. Then also they win for the time being.

When you say with a profit, do you know the how much gain EPF made out of the deal? According to one poster's estimate the gain is around 5% per annum. If it's true then that's shameful. You get get almost double from a fixed deposit. Central bank announced it's 800 million or something without saying anything about the percentage. I remember there was a daily news article saying the "Langama" made this much revenue this year without saying the net profit after expenses.

Dear AJ

I dont know what their profit.... that is why i placed If...
If they have plan to collect back below what they have sold price.. say 20% below? we dont know that...
but we can say something as per the prevailing transaction....

Think If EPF bought JKH at 195 Friday? how many blame them they did wrong thing same time they sold and how many blame them they did wrong thing....

hariesha wrote:Shall we please stop arguing on negative aspects, EPF has made some gains, may be not the best possible return. All the times it's not happening. They haven't held the entire quantity all the time. In addition to the final deal in between they have traded on this share.

Big or small they have made a gain something close to 1b. But look at the other positives in the deal.

1. Country got considerable FC, when we needed it most.

2. JKH got a partner who can invest for the long run, and who will support company’s future funding needs.

3. Country has got a boost among foreign investors, as buyer was a very much respected, well managed sovereign wealth fund and the deal was done with more than three months of study by two consultancies, one being a US company.

4. Last but not least, we small investors in CSE should be the happiest group in this deal. As this is a local to foreign deal, market liquidity will improve substantially. EPF has indicated that they hope to invest major part of the proceeds in the local market immediately. But not like earlier, they will be more careful and selective.

Identify the companies that will be targeted by EPF and have some exposure to those. But don’t expect wild price movements in a very short period.

Ppl like you only make this country worst. Mate its obvious tis deal is done by corrupt officials to redeem themselves from thier incorrect decisions made in da past. don't u think mate tis inefficient offificials get fired from de office? At de expense of poor employees contributed to EPF u want 2 get Stock mkt recovered. And for some officials fault u want US $ by selling EPF assets.

And sometimes later u talk abt patriotism. If some1 talk against these corrupt inefficient things, they are betrayers of da country.

we dont need to be 100% correct bt lets atleast hand over a corruptions free, efficient country to our future generation.