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Press Release

NAMAL Rewards Fund Investors

National Equity Fund Declares Tax-free Dividend of 20% Consistent Dividend Record of 13 Years.

NAMAL Builds Good Track Record for Funds

NAMAL Launches Sri Lanka's First Money Market Fund

An Exceptionally Good Year to Unitholders of NAMAL

National Equity Fund declares highest ever dividend of Rs. 2/- per unit

NAMAL Cuts Front End Fee to 2%

NAMAL's Funds Release Interim Results

NAMAL Income Fund Generated 13.23% return to long term investors

NAMAL Builds Good Track Record for Funds

National Asset Management Limited popularly known as NAMAL stated in a press release that the Unit Trust Funds managed by NAMAL have recorded good performance during the six months period ended 30th September 2004.

In the six month period National Equity Fund (NEF), NAMAL Growth Fund (NGF) and NAMAL Income Fund (NIF) posted returns of 12.19%, 11.33% and 3.19% respectively. Moreover, for the four year period ending 30th September 2004 the return to investors of NEF and NGF and NIF was 142.82%. 136.96% and 49.08% respectively.

NEF, the first fund launched by NAMAL pays dividends annually and has distributed Rs 11.85 per unit since its launch in December 1991. NEF distributes income to its investors every year in the month of March.

In contrast to NEF, NGF does not pay out regular dividends. NGF as a growth scheme accumulates its investment income to reap the benefits to investors in the long term. Though the fund paid dividends in the years 1999 and 2001 amounting to Rs 1.25 per unit, these dividends were paid primarily as a measure of tax administration, the release further added.

NIF has distributed Rs 10.11 per unit since its launch in 1997, and it is mandated to pay half yearly dividend to investors. Currently the income distributed by all funds are exempt from tax, in the hands of investors.

During this period the Colombo Stock Market had achieved positive growth mainly driven by the domestic investors. Though the election of a new government without a simple majority in parliament initially affected the sentiments, they appeared to have pushed aside those concerns. In the meantime the macro implications faced by the country in terms of higher energy cost due to price increase in the world market, drought and the stalled peace process all of which points to slow down the economy from the previous forecasts.

Nevertheless, the release of excellent corporate results, new listing of shares in the Colombo Stock Market and strategic buying in some listed companies appears to be sustaining the current rally in the market.

NAMAL's Managers exercised great care in selecting appropriate share investments to deliver above average returns to the investors.

The overall interest rates in this period remained around 7% per annum. The annual average inflation rate as measured by the Colombo Consumer Price Index (CCPI) seems to be on the uptrend. Moreover, the point to point inflation has been steeply increasing in the latter part of the period under review and this trend appears to cause negative real returns to investors in fixed income securities.

"We have been closely monitoring this development with the view to enhance the returns to the investors in the coming period" Mr S Jeyavarman CEO of NAMAL stated.

NEF and NGF having exposed to the equity market recorded higher returns to the investors. However, the NAMAL Income Fund, exposed only to the fixed income securities market recorded returns in line with prevailing interest rates. Our family of funds provides greater flexibility to any investor to plan their investments according to their individual needs, by exposing to equity and income funds under our management he explained.

"NEF and NIF paid dividends in a consistent manner to compensate the investor’s current cash needs. Meanwhile many investors opted to reinvest their dividends to aim at greater growth in their savings" he further stated. "The dividends continue to be tax free in the hands of the investors" he added.

More recently NAMAL introduced a new investment scheme to the investing public referred as NAMAL Money Market Fund. It is another innovative Fund having considered the needs of the investors to manage their short term surplus cash in the money market. This fund targets capital safety and regular income, the release stated.

NAMAL is the pioneer licensed unit trust management company offering professional fund management services over 12 year period and offers innovative investment schemes to small and large investors.

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NAMAL Launches Sri Lanka's First Money Market Fund

National Asset Management Limited (better known as NAMAL) has launched the NAMAL Money Market Fund. The fund, a first of its kind in Sri Lanka, offers a new investment opportunity to invest and manage your short term cash. The Fund will be officially open and begin accepting investments commencing 6th September 2004. We intend achieving three key objectives for the investor, explains Mr Jeyavarman, CEO of NAMAL.

Maximise current income, Preserve capital and Provide liquidity.

The Fund’s features are designed to achieve these objectives. The fund will distribute four dividends a year providing regular income. Since dividends and withdrawals are exempt from tax, this special feature makes the fund an attractive tax efficient method of investment, for short term investors. In order to minimise risk and also ensure high liquidity, the fund will only invest in high quality fixed income securities, with a maximum maturity period of one year.

A unique feature in the fund, is that investments and withdrawals do not attract any charge. Additionally management fees too are kept low, to optimise returns to the investor.

All investments in the NAMAL Money Market Fund will be in scripless form. As a result investments and withdrawals can be done conveniently, with minimum paperwork. Investors can withdraw their money partially or totally within two working days. Investors will receive regular reports to keep them updates on the Fund’s activities and performance. Updated information will also be available on the NAMAL website www.namalfmc.com Mr Jeyavarman added.

The Fund will officially accept investments, commencing 6th September 2004. Initial investments will be a minimum of Rs 1,000,000/- and multiples of Rs 100,000/= thereof. Subsequent investments could be any amount not less than Rs 100,000/-.

We are offering a special fixed price of Rs 10/- per unit during the introductory period 6th September to 10th September 2004, said Mr Jeyavarman. Investments made after the fixed offer period will be at the current price.

Deutsche Bank AG will act as the Trustee & Custodian to the NAMAL Money Market Fund. NAMAL will be the Manager & Registrar to the Fund.

NAMAL is the pioneer in the fund management industry in Sri Lanka, and has a wide spectrum of funds and portfolios under its management. It is a subsidiary of the DFCC Bank, and is licensed by the Securities & Exchange Commission of Sri Lanka (SEC) to operate and manage unit trust funds and portfolios.

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AN EXCEPTIONALLY GOOD YEAR TO UNITHOLDERS OF NAMAL

National Asset Management Limited (NAMAL) Managers of National Equity Fund (NEF) NAMAL Growth Fund (NGF) and NAMAL Income Fund (NIF) released the Annual Report of the funds for the year ended 31st March 2004.

The year under review was an eventful year to the investors in NAMAL Funds' stated the press release from NAMAL. The NEF, a pioneering fund launched in Sri Lanka in 1991 recorded 46.37 percent value appreciation while maintaining its conservative approach in stock investments and distributed Rs 2/- per unit as tax free dividends in March 2004, a highest ever dividend in its history. Meanwhile NGF a more pro-active fund in the stock market recorded 60.59 percent value appreciation in this period. NGF adopted active asset allocation policy to control market risk and to protect investors when in adverse periods. NIF invests its fund in fixed income securities with the objective of optimizing current income to investors, continued to remain in short term maturities in a rapidly falling interest rate environment. NIF recorded 7.46 percent value appreciation and distributed two dividends amounting to 96 cents per unit in line with its objective of giving current income to its investors. Moreover lack of quality high yielding corporate papers affected the return from NIF's fixed income investments in this period.

Notwithstanding the political uncertainty in the 3rd and 4th quarters, the macro economic conditions improved during the year under review. The better domestic conditions as a result of continuation of ceasefire, strong financial consolidation efforts, accommodative monetary policy, renewed commitment to structural reforms and an improved external environment contributed to the turnaround of the economy. The GDP growth rate of 5.9% achieved in the year 2003 brought a more optimistic environment to the investors. However, the political uncertainty emerged in November 2003 continued to escalate towards the elections in April 2004 and thereafter.

The market interest rate continuously declined over a year, started to pick up during the month of December. Although the interest rates improved slowly since then, the one year treasury bill rate, a bench mark indicative rate closed at 7.66% in March 2004 still well below the rate of 9.04% prevailed one year before in March 2003.

Colombo Stock market performance was exceptional in the first half of the year lagged during the months of November and December. Mostly, due to political uncertainty and the introduction of tax on the profits from the share trading. Overall, it was an outstanding year for Colombo Stock Market with All Share Price Index (ASPI) increasing by 73.8%. Even though at times market was very volatile reacting to political events, the sustenance of the market have been related to the optimism generated by the continuation of the ceasefire, the growth of the economy and the expectation of excellent corporate profits.

• National Equity Fund

  The National Equity Fund registered a total earnings of Rs 495.21 million for the year ended 31st March 2004 against Rs 217.9 million in the previous year. Total return after unit holders activities improved in this year from Rs 214.3 million to Rs 339.0 million. NEF distributed Rs 146.2 million as dividends to the unit holders.

  At the end of March 2004, NEF has distributed Rs 11.25 per unit as dividends from its inception in 1991. The original unit holders who have reinvested their dividends in the same fund yielded an annualized return of 11.03%. NEF had an asset allocation of 51% in equity and the balance in fixed income instruments at the end of the financial year.

• NAMAL Growth Fund

The NAMAL Growth Fund's total earnings stood at Rs 61.7 million as on 31st March 2004 against Rs 16.87 million reported in the previous year. Total return after unit holder activities amounted to Rs 61.8 million compared to 16.4 million recorded in the previous financial year.

At the end of March 2004, NGF's original unit holders who have reinvested their dividends in the same fund yielded an annualized return of 11.2%. At 31st March 2004 NGF has an asset allocation of 56% in equity and the balance in the short term money market investments to control market risk from general uncertainties prevailed in the country.

• NAMAL Income Fund

  The NAMAL Income Fund recorded a total earning of Rs 14.1 million in the year ended 31st March 2004 against the Rs 12.5 million made in the previous year. The increase in the earnings mainly attributed to the increase in fund size by Rs 58.1 million. NIF distributed Rs 15.4 million as dividends in this period.

  At the end of the financial year under consideration, original unit holders who have reinvested their dividends in the same fund yielded an annualized return of 13.05%. NIF's investments in the fixed income securities mainly had investments with maturities less than one year at the end of the period.

NAMAL is the pioneer fund management company in commenced operations in 1991 and is a subsidiary of DFCC Bank. NAMAL provides host of services to investors to manage their savings and plan their taxes.

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