IMF programme, economic outlook and portfolio strategy

[@Touringlanka]

Very good session. Thanks

[@MrSudsez]

Very informative session. Thanks all

[@janakapriyantha1611]

Thank you all for brining us timely valuable discussion ..

[@wijesiriupendra1751]

thank for all

[@Honokaa65]

What is the downside of HNB ? There should be some if it is ignored by high profile investors having forward PBV of .34. .34 means, to rerated at average PBV of 1 time it has to be appreciate 2 times from current 230 to 690 by 460. Current NAV of HNB is 400. To achieve NAV at 2025 December it should earn Rs:290 per share. Hnb has over 100bn for Isb provisions. Overall 7% hair cut on ISBs meaning 85 bn overall or Rs:150 per share provisions will be released back to assets from provisions. Adding it to NAV 400 will increase NAV to 550. From where the rest of the 140 per share assets comes from ? Bul sit

[@kalumkalum7865]

@Honokaa65 thank you for your analysis. Do you think it will appreciate to 500 at-least ?

[@Honokaa65]

@@kalumkalum7865 I would say there is a probability to go past 500 than the possibility of not going past 500. Current NAV - 408. With the 7% hair cut and ignoring the day 1 loss there might be provision reversal and consent fee of 130 per share. They have more than USD 600mn ISBs. The past due interest for last 2 and half years will be back as new bonds after a 11% cut on accumulated interests. I don't know the rate of bonds but if we assume 6%, past due interests will be 90mn USD. After the haircut they will have a new USD 80 million (23Bn LKR) bond or 41 NAV per share. Totally NAV - 580. According to the assumptions from the experts in this discussion they think HNB net assets per share will be 690. (They might culculate on more info than us). Anyway It will take months to reach there. Keep until they release 2024 December quarter reports.

[@DIULA1231]

7% haircut , you would consider NPV loss due to EDR . provision was 55% , I think Reversal amount would be 12-15% of this.

[@kalumkalum7865]

@ thanks for your reply 🙂

[@Honokaa65]

@@DIULA1231 It is not correct. There is a local option for 30% with no hair cut. Since they have allocated 55% , reversal due to taking local option would return back 16.5%(30% * 55%) . Then the rest of the amount will have 7% haircut. Allocation of 55% is based on assumption of 28 - 35% haircut. Surely with increased ratings, NPV will be increased than default rating. Then consent fee of 1.8%. Then with getting out of default, SL has to pay due interest for 2 and half years since declaring bankruptcy. For bonds of 6% , the due interest will be around 15%. I don't know how you came up with 12-15% value. But according to my above calculations 16.5% + 1.8% + 14% = 33% will be provisioned back.

[@vishvanathwickramesooriya6812]

ACL KCAB APLA CIND ... GRAN TAFL ... Earnings Growth + Low and No Debt .