The HNB and the DFCC Bank have begun marketing the initial public offering of the Namal Acuity Value Fund, a billion rupee 10-year closed-ended unit trust which is the first of its kind in the country, using the extensive branch network of both banks.

An Acuity spokesman said that the CEO of Namal and a representative of Acuity are currently in Jaffna where HNB has six branches promoting the fund through investor forums.

"Over 100 participants have already confirmed that they will attend these meetings and the response to the fund received from other HNB branches has also been encouraging," a spokesman for Acuity said.

He said that Acuity and Namal representatives have also made presentations on the IPO to investors at the CSE centres in Kandy and Matara where also the response has been very encouraging. Further presentations are due in Kurunegala, he said.

HNB and DFCC have already pledged Rs.100 million each seed capital for the new fund which is the country’s first closed-ended unit trust to be listed on the Stock Exchange.

The fund’s promoters are seeking regulatory approval enabling foreign investment in this fund where the units will be tradable on the CSE leaving its managers free to concentrate on investment activity without having to bother about redemption during the 10-year duration of the fund.

"This way, investors who want to exit could do so through the Stock Exchange while the managers will not have to think about retaining liquidity to meet redemption demands," an analyst explained.

It is understood that several institutional investors are committed to invest in the IPO.