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Message: <blockquote data-quote="lkdood" data-source="post: 7715214" data-attributes="member: 92282">Sri Lanka's Employees Provident Fund (EPF), a pension  fund of private citizens managed by the state, has bought an 11 percent  stake in Ceylon Hotels Corporation which lost 35 million rupees last  year, for 700 million rupees. A  stock exchange filing said Galle Face Hotel, its controlling  shareholder, had sold 20 million shares at 35 million rupees, which was  11.63 percent of Ceylon Hotels Corporation stock. The shares were bought by the EPF, a compulsory retirement fund of  private citizens, which is managed by the state.   Ceylon Hotels Corporation lost 35.9 million rupees in the year to March  2010, though it made 9 million rupees in the March quarter.   The EPF's managers earlier spent 1.4 billion rupees buying into Galadari  Hotels Lanka Ltd, another loss-making hotel that was dragging down its  controlling shareholder Nawaloka Hospitals, raising eye brows.   Analysts immediately upgraded the hospital group.   Nawaloka deputy chairman Jayantha Dharmadasa later told shareholders  that the sale was a "great relief from a financial perspective."   Markets punters now facetiously call the EPF 'the buyer of last resort'.  The fund is under the management of a unit of Sri Lanka's central bank,  which is the lender of last resort to the island's banking system.                                 The  fund's management has also come under fire earlier for buying government  bonds at low prices and helping the state engage in financial  repression to fund its deficit.  With interest rates low and stocks on the upturn, the EPF is right to  buy into stocks, but analysts say its stock picks leave a lot to be  desired, raising questions about why such a stock is bought.   It is also feeding a mania over hotel stocks similar to a plantation  stock mania that was seen over a decade ago, when a series of state  plantations were privatized. Prospects for tourism are bright following  the end of a 30-year war.   In March the EPF bought a 10 percent stake in Lighthouse Hotel from  Hayleys Ltd, which first gave rise to the 'buyer of last resort' tag.   Lighthouse is a well-managed hotel, which had higher levels of occupancy  and good rates even in the worst of times, but it has little prospects  of growth.   Analysts say that a 'good company' does not necessarily mean it is a  'good share' as the worth of a share is decided by its price, where all  the good aspects are already incorporated into the price.   Lighthouse for example is trading at over 130 times its profits,  recalling the dot com bubble.   Meanwhile the selling down by controlling shareholders of hotel stocks  also indicates that their owners think that prices are good enough to  exit. Even the John Keells group sold down its hotel unit recently to  raise cash for expansion.                                LBOserama gan na wage yan ne 'suba anagathayak' <img src="/styles/default/xenforo/smilies/default/shocked.gif"  class="smilie" loading="lazy" alt=":shocked:" title="Shocked    :shocked:" data-shortname=":shocked:" /></blockquote>

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