Thursday, May 16, 2013

Today 6,287.00 3,531.37 Point Change + 65.88 + 33.03 % Change 1.06 % p 0.94 % p

ASPI S&P SL 20 Index YTD Performance ASPI S&P SL 20 Index

Level 23, East Tower, World Trade Centre, Colombo 01 Tel: +94 11 727 7000, Fax: +94 11 727 7099 Email: research@equity.softlogic.lk

11.4% 14.5% 1,881.2 871.7 58.6 40.2 2,414.2 85.1 1,275.3 1,190.2 10.7

Today's Turnover (LKR mn) Annual Average Daily Turnover (LKR mn) Volume (mn) Annual Average Daily Volume (mn) Market Capitalization (LKR bn) Net Foreign Inflow / (Outflow) [LKR mn] - Foreign Buying (LKR mn) - Foreign Selling (LKR mn) YTD Net Foreign Inflow / (Outflow) [LKR bn]

Bourse gains with big caps in the green

CSE Diary for 16.05.2013

Index jumps 66 points: The Colombo stocks saw a continuous uptrend today driven by the large cap counters regaining institutional, high net worth and foreign interest. The surge in the index was heavily weighted upon John Keells Holdings, Ceylon Tobacco Company, Lanka Orix Leasing, Commercial Bank and Hatton National Bank. 146 counters contributed positively for the index as against 65 that contributed negatively. The gain S&P SL20 index was just under 1.0% while turnover for the day rushed to LKR1.8bn Aitken Spence led the crossings board: Aitken Spence, conglomerate with heavy exposure to the leisure sector recorded 2 large crossings accounting for 7.1mn shares dealt at LKR132.6. The transactions contributed 50% to the days turnover. During the same time period the counter recorded two onboard blocks of 208k and 102k shares at a similar price. The counter closed the day on a negative note at LKR133.0 (-1.4%). The day saw 10 crossings in total

with 2 crossings in Commercial Bank, 3 in Piramal Glass and 1 in Dialog. JKH, JINS and OSEA reach 52-week highs out of the top performers: John Keells Holdings renewed its 52week high to LKR278.5 as the counter today closed at an all-time high closing price of LKR278.0 on adjusted price basis. The counter which trades at expensive valuations is rich in foreign and local interest. Both Janashakthi Insurance and Overseas Reality reached 52-week high prices of LKR14.2 and LKR17.3 respectively. Retail interest moderate and on selected counters: Retailers were slow today to enter the market as most remained on the sidelines. However, retail interest was noted in Janashakthi Insurance, Sanasa Development Bank and Regnis.

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) Apr-13 as at 16.05.2013 YoY Change Annual Avg Week ending 17.05.2013 8.75 9.91 10.84 13.48 1.30

6400 6200

Index

6000
5800 5600

6.4 8.8

ASPI
3550 3500 3450 3400 3350 3300 3250 3200

Turnover LKR ('mn)

5,000 4,000 3,000

150.0

Volume ('mn)

Index

100.0 50.0 0.0

2,000 1,000
0

S&P SL20

Turnover

Volume

Today All Share Price Index S&P SL20 Index Turnover (LKR mn) Turnover (USD mn) Volume (mn shares) Traded Entities Market Capitalization (LKR bn) Foreign Purchases (LKR mn) Foreign Sales (LKR mn) Net Foreign Inflow (LKR mn) Market PER (X) Market PBV (X) Market Dividend Yield SECTOR INDICES Banks, Finance & Insurance Beverage, Food & Tobacco Construction & Engineering Diversified Healthcare Hotels & Travels Land & Property Manufacturing Plantation Telecom 6,287.0 3,531.4 1,881.2 14.9 58.6 252 2,414.2 1,275.3 1,190.2 85.1 17.0 2.3 2.1 Today 14,085.7 17,588.9 2,968.3 2,095.5 713.6 3,622.0 611.7 3,052.6 830.7 174.4

Pre Day 6,221.1 3,498.3 1,695.9 13.4 49.1 253 2,384.5 1,088.8 228.9 859.9 16.8 2.3 2.1 Pre Day 13,915.8 17,432.9 2,929.7 2,078.9 714.8 3,569.9 599.6 3,004.9 827.4 172.7

Change % 1.06% p 0.94% p 10.93% 10.93% 19.45% -0.40% 1.25% 17.13% 420.01% -90.11% 1.25% 1.24% 0.00% % Change 1.22% 0.89% 1.32% 0.80% -0.17% 1.46% 2.02% 1.59% 0.40% 1.00% p p p p q p p p p p

Last Week 6,238.7 3,526.5 2,137.5 16.9 74.0 258 2,391.2 650.0 455.9 194.1 16.9 2.3 2.1 Last Week 14,231.8 17,378.4 3,041.7 2,067.0 716.8 3,591.6 601.3 3,025.7 814.3 171.4

% WoW Change 0.77% 0.14% -11.99% -11.99% -20.79% -2.33% 0.96% 96.19% 161.06% -56.17% 0.96% 0.96% 0.00% % WoW Change -1.03% 1.21% -2.42% 1.38% -0.45% 0.85% 1.72% 0.89% 2.01% 1.77% Page | 2.

Softlogic Equity Research

High Index Calibre USD350 Mn

Company
JOHN KEELLS HOLDINGS CEYLON TOBACCO CARSON CUMBERBATCH NESTLE LANKA SRI LANKA TELECOM COMMERCIAL BANK [V] BUKIT DARAH DIALOG AXIATA HNB [V] AITKEN SPENCE DISTILLERIES LOLC CARGILLS DFCC BANK SAMPATH BANK ASIAN HOTELS & PROPERTIES

% of Mkt Cap 9.9% 6.6% 3.6% 4.2% 3.2% 3.8% 3.0% 3.2% 2.3% 2.2% 2.3% 1.2% 1.5% 1.6% 1.6% 1.3%

Volume 247,795 7,136 310 308 75,633 1,323,423 799 5,526,765 72,315 7,565,959 12,142 90,837 3,586 22,235 113,207 584

Turnover LKR ('000) 68,757.87 5,962.16 138.16 582.12 3,257.63 152,971.36 571.54 52,533.25 12,320.81 1,003,427.84 2,232.88 5,539.44 582.69 3,307.05 25,504.50 42.63

Turnover USD ('000) 544.90 47.25 1.09 4.61 25.82 1,212.27 4.53 416.32 97.64 7,952.01 17.70 43.90 4.62 26.21 202.12 0.34

Intraday Intraday High (LKR) Low (LKR) 278.50 845.00 446.00 1,890.00 44.00 116.70 720.00 9.60 172.00 136.00 184.00 62.50 163.50 149.50 227.00 73.00 275.00 830.00 445.50 1,890.00 42.70 115.50 710.20 9.40 168.00 132.60 181.50 59.50 162.00 147.00 224.50 73.00

Close 278.00 845.00 445.80 1,890.00 43.10 116.60 714.00 9.60 171.00 133.00 184.00 62.20 162.10 148.90 225.80 73.00

Price Gainers
Company
MERC. SHIPPING BOGALA GRAPHITE PALM GARDEN HOTL JANASHAKTHI INS. SIGIRIYA VILLAGE

Price Losers
Today 185.00 26.00 101.60 14.00 76.20 Change + 35.40 + 3.60 + 11.20 + 1.50 + 8.10 % Change Company 23.66% 16.07% 12.39% 12.00% 11.89%
SERENDIB LAND S M B LEASING [X] CEYLON LEATHER [W 0013] CHEMANEX ENVI. RESOURCES [W 0003]

Today 1,200.00 0.40 4.40 85.00 1.60

Change - 599.90 - 0.10 - 0.60 - 6.80 - 0.10

% Change -33.33% -20.00% -12.00% -7.41% -5.88%

Top 05 Performers for the Day

Company
AITKEN SPENCE COMMERCIAL BANK PIRAMAL GLASS JKH DIALOG

Today 133.00 116.60 6.90 278.00 9.60

Pre Day 134.90 115.00 6.90 274.20 9.50

% Change -1.41% 1.39% 0.00% 1.39% 1.05%

Volume (mn) 7.57 1.32 11.00 0.25 5.53

Contribution to Total T/O 41.6% 6.3% 3.1% 2.8% 2.2%

Turnover (LKR) 1,003,427,839 152,971,364 75,901,331 68,757,873 52,533,248

Most Active
Company
PIRAMAL GLASS AITKEN SPENCE DIALOG S M B LEASING JANASHAKTHI INS.

Today 6.90 133.00 9.60 1.00 14.00

Pre Day 6.90 134.90 9.50 0.90 12.50

% Change 0.00% -1.41% 1.05% 11.11% 12.00%

Volume (mn) 11.00 7.57 5.53 5.09 3.24

Contribution to Total T/O 3.1% 41.6% 2.2% 0.2% 1.8%

Turnover (LKR) 75,901,331 1,003,427,839 52,533,248 4,579,935 43,601,577

Softlogic Equity Research

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Currency Board
Local - Indicative Rate against LKR
Currency Australia China EU India Japan Malaysia Russia Saudi Arabia Singapore Switzerland Thailand UK USA Dollar Yuan Euro Rupee Yen Ringgit Rouble Riyal Dollar Franc Baht Pound Dollar Indicative Rate 16.05.2013 124.94 20.52 162.47 2.30 1.24 42.03 4.01 33.65 101.37 130.67 4.25 192.17 126.19

Announcements
Dividends
Company Printcare PLC 0 0 0 0 0 0 0
Company Description

DPS (LKR) 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Proportion 0

XD Date 28-05-2013 0 0 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00

XR Date

Payment Date 06-06-2013 1/0/1900 1/0/1900 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00
Renunciation

Rights Issues / Scrip Dividend / Sub division / Capitalization

No Announcements 0 0 0 0 0 1/0/1900 1/0/1900 1/0/1900 1/0/1900 1/0/1900 1/0/1900

Source: www.cbsl.gov.lk

Global Markets
Index AMERICA Dow Jones Industrial Average S&P 500 Index EUROPE EURO STOXX 50 Price EUR FTSE 100 Index ASIA Nikkei 225 Hong Kong Hang Seng Index
* Time is as at ET

Value 15,275.7 1,658.8 2,812.3 6,706.6 15,037.2 23,082.7

Change 60.4 8.4 2.8 13.0 -58.8 38.4

Change % 0.40% p 0.51% p 0.10% p 0.19% p -0.39% q 0.17% p

Time* 0-Jan 0-Jan 07:14 07:15 02:28 04:01

Source: www.bloomberg.com

Commodity Markets
Commodity ENERGY Crude Oil (Brent) Crude Oil (WTI) AGRICULTURE ICE Cotton #2 CBOT Wheat METALS COMEX Gold COMEX Silver COMEX Copper
* Time is as at ET

Units USD/bbl. USD/bbl. USd/lb. USd/bu. USD/t oz. USD/t oz. USd/lb.

Price 103.59 93.66 85.78 696.25 1,373.30 22.21 323.55

Change -0.09 -0.64 -0.67 2.50 -22.90 -0.45 -2.95

Change % -0.09% q -0.68% q -0.78% q 0.36% p -1.64% q -1.98% q -0.90% q

Time* 06:58 07:04 06:59 07:24 07:04 07:04 07:04

Source: www.bloomberg.com

Softlogic Equity Research

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CSE Announcements
Galadari Hotels Lanka [GHLL: LKR14.2] -Issue of shares by way of a Private Placement:
Name of the party to whom shares were alloted No of shares alloted and listed Value of the loan which was converted (LKR) Price per share Date listed Galadari Brothers Company (LLC) 318,395,504 7,163,898,840 22.5 16th May 2103

Orient Garments [OGL: LKR9.8]: Mr. Harsha Nilantha De Silva, Chairman of OGL tendered his resignation from the board w.e.f 4th April 2013. Lanka Floortiles [TILE: LKR77.1], Lanka Walltiles [LWL: LKR72.5], Horana Plantations [HOPL :LKR28.2] : Mr. A T P Edirisinghe and Mr. Sunil Mendis who served as Independent/Non-Executive Directors and Mr. J C Page and Mr V R Page who served as Non-Executive Directors resigned from the Directorate of the Company w.e.f 15th May 2013. Malwatte Valley Plantations [MAL: LKR4.6, MAL.X: LKR4.7]: The Board being of the view that the surplus funds of approximately LKR175,000,000 in the Company, is not required for its Immediate purposes, decided that it is in the interest of the Company that the Company offer to purchase proportionately part of the issued shares of the Company and cancel same. Accordingly the Circular Resolution Passed on the 16th Day of May 2013 resolved that the Company do offer to purchase subject to shareholder approval; 32,084,308 issued Voting Ordinary Shares, out of the total issued Voting Ordinary Shares of 224,590,160, constituting approximately 14.28%, in the proportion of 1share out of every 7 shares held, at a price of LKR5.0 per share 3,285,714 issued Non-Voting ordinary shares out of the total Non-Voting shares in issue of 23,000,000 constituting approximately 14.28% in the proportion of 1 share out of every 7 shares held, at a price of 3.50 per share. The terms of the Offer and the consideration to be paid for such shares is in the opinion of the Company's Auditors a fair value The Board is not aware of any information that has not been disclosed to shareholders which is material to an assessment of the value of the shares, and as a result of which the terms of the offer or the consideration offered for the shares are unfair to shareholders accepting the offer. Subject to approval of shareholders, the offer to purchase shares would commence on 25 th June 2013 and close on 16th July 2013.

Local News
Sri Lanka rupee strengthens amid tight liquidity: Sri Lanka's rupee strengthened to 125.70/80 to the US dollars in the spot in mid-morning trade Thursday, amid tight liquidity but a two week liquidity auction has been announced, dealers said. The Central Bank cut its policy interest corridor by 50 basis points to 7.00 and 9.00% last week, after killing liquidity and selling down its Treasury bills stock steadily for around two weeks, keeping the system tight. Selling down Central Bank held bills and withdrawing liquidity creates a 'shortage of rupees' eventually reducing import demand. The rupee closed yesterday at 126.00 to the US dollar from around 126.50/70 levels before the rate cut. [Source: www.lbo.lk] Sri Lanka exports to India surge after free trade agreement: Sri Lanka's exports to India have surged under a free trade deal, growing six fold, with the number of items going up four fold to 2,100 but most of the imports to the island take place outside the agreement, economists said. "On average 70% of Sri Lanka's exports to India are under the free trade agreement, compared to only 30% Indian exports coming to Sri Softlogic Equity Research Page | 5
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Lanka under the FTA," Saman Kelegama, head of Sri Lanka's Institute of Policy Studies told a business forum in Colombo. "Sri Lanka's exports to India have increased from one percent of overall export before the FTA to nearly 6 percent." To favour Sri Lankan producers (against the interests of the consumers), the agreement was signed on the basis of asymmetric benefits. "When bilateral free trade agreement was signed in 1998, the asymmetry between the (producers of the) two countries was accommodated by having special and differential treatment in favour of Sri Lanka," Kelegama said."A larger negative list a longer or longer tariff liberalization period for Sri Lanka. High revenue items to Sri Lanka not being subject to liberalization under the FTA like motor vehicles, more favourable rules of origin etc." [Source: www.lbo.lk] Economic Development Ministry launches Matching Grant Scheme: As Sri Lanka embarks on a journey to become the Wonder of Asia, Ministry of Economic Development has introduced a Matching Grant Scheme under the Mahinda Chintana Vision for the Future to support the tourism related SMEs and strengthen the local economy through sustainable tourism development. Accordingly the Ministry of Economic Development has made available a sum of LKR2,000 mn with a credit facility from the World Bank as an outright grant for the development of tourism and tourism related Small and Medium Enterprises (SMES). Thereby, the Ministry of Economic Development will bear the cost for either 50% of the project value or a maximum of LKR10 mn of any SME project under the tourism industry. It is the governments belief that the SME sector would bridge the gap between large scale corporates and micro level enterprises there by further contributing towards the objective of strengthening the economy of the country. [Source: www.ft.lk]

Global News
Euro-Area Exports Increase for Third Month on Germany: Euro-area exports increased for a third month in March as the currency blocs four largest economies all shipped more goods, adding to signs the region is beginning to emerge from a record-long recession. Exports rose a seasonally adjusted 2.8% from February, when they increased 0.2%, the European Unions statistics office in Luxembourg said today. Imports decreased 1% after a 2.2% drop a month earlier. The trade surplus widened more than economists estimated to EUR18.7 bn (USD24.1 bn) from EUR12.7 bn. The euro-area economy contracted 0.2% in the first three months of 2013, extending its recession to a sixth quarter and increasing pressure on leaders to spur growth. The ECB forecasts the euro economy will shrink 0.5% this year, while the European Commission sees a 0.4% contraction. [Source: www.bloomberg.com] Japan GDP Jumps Most in Year as Consumers Open Wallets: Japans economy expanded the most in a year last quarter as consumer spending and export gains outweighed the weakest business investment since the wake of the March 2011 earthquake and tsunami. Gross Domestic Product rose an annualized 3.5%, a Cabinet Office release showed in Tokyo. Private consumption, making up 60% of GDP, contributed 2.3 percentage points to the jump. Nominal GDP, which is unadjusted for changes in prices, rose 1.5%, also the most in a year. Japan is clearly back from stagnation last year, said Naoki Iizuka, an economist at Citigroup Inc. in Tokyo. The key from here is whether Abe can unveil a strong growth strategy. If he succeeds, that will boost business investment to support growth. Abe plans next month to unveil his so-called third arrow of structural reform, following the first two arrows of monetary and fiscal stimulus. [Source: www.bloomberg.com]

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