Wednesday, May 29, 2013

Today 6,455.81 3,644.64 Point Change + 21.11 + 17.68 % Change 0.33 % p 0.49 % 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

14.4% 18.1% 906.1 897.4 49.3 40.9 2,479.0 102.5 239.4 136.9 13.2

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 trends up on volatile footing

CSE Diary for 29.05.2013

Bourse gains closing up on 6,500: The bourse witnessed heavy volatility throughout the day though the index stayed in the green all day long providing some comfort to investors. Considerable improvement in retail activity was observed during the day on selected counter while Commercial Bank, Ceylon Beverage Holdings, Sri Lanka Telecom and Asian Hotels and Properties were the primary contributors to the index. Retail favourite counters climb to the top of the turnover list: Nation Lanka Finance saw renewed buying following a prolonged quiet period as the counter saw 9.7mn shares being traded with 1 large block of 715k share changing hands at LKR10.2. The counter gained sharply closing with a 17% gain at LKR11.7. Blue chips Chevron Lubricants and John Keells Holdings generated investor attention with the latter recording some selling pressure as counters closed at LKR318.1 and LKR288.6.

Land and Property sector retains buying interest: Investor play was steady in the land and property counters Overseas Reality and Colombo Land as the former renewed its 52-week high to LKR21.3 while both counters recorded gains of 2.4% and 2.7%. Retail interest strengthens: Retail investors were active on a otherwise dull day changing the momentum on the market. Nation Lanka Finance, Colombo Land and Overseas Reality were some of the favourite picks of the retailers.

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) Apr-13 as at 29.05.2013 YoY Change Annual Avg Week ending 31.05.2013 8.73 10.86 13.08 -7.89 6.4 8.8 9.90

6600 6400

Index

6200 6000 5800 5600

ASPI
3600

Turnover LKR ('mn)

3700

5,000 4,000 3,000

80.0

Volume ('mn)

60.0 40.0 20.0 0.0

Index

3500

3400 3300
3200

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 6,455.8 3,644.6 906.1 7.2 49.3 246 2,479.0 239.4 136.9 102.5 17.5 2.4 2.1 Today 14,044.5 19,471.1 2,944.6 2,125.8 714.0 3,613.4 666.7 3,206.3 821.2 173.2

Pre Day 6,434.7 3,627.0 553.2 4.4 36.2 250 2,470.9 107.6 32.9 74.7 17.5 2.4 2.1 Pre Day 13,987.3 19,384.2 2,914.7 2,127.7 703.2 3,605.2 655.3 3,193.5 829.7 172.4

Change % 0.33% p 0.49% p 63.79% 63.79% 36.04% -1.60% 0.33% 122.55% 316.55% 37.18% 0.33% 0.33% 0.00% % Change 0.41% 0.45% 1.03% -0.09% 1.53% 0.23% 1.73% 0.40% -1.02% 0.47% p p p q p p p p q p

Last Week 6,461.6 3,664.0 766.2 6.1 20.5 248 2,481.3 356.4 48.0 308.4 17.5 2.4 2.1 Last Week 14,253.6 18,903.9 2,931.8 2,164.9 716.4 3,595.2 640.2 3,167.4 825.9 175.3

% WoW Change -0.09% -0.53% 18.25% 18.25% 140.71% -0.81% -0.09% -32.83% 185.45% -66.77% -0.09% -0.09% 0.00% % WoW Change -1.47% 3.00% 0.44% -1.81% -0.34% 0.51% 4.13% 1.23% -0.57% -1.21% 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 10.0% 7.4% 3.5% 4.4% 3.2% 4.0% 2.9% 3.1% 2.2% 2.2% 2.4% 1.2% 1.6% 1.5% 1.5% 1.4%

Volume 203,092 33,978 175 1,004 277 322,028 174 650,014 25,580 16,537 107,730 22,083 2,570 6,180 83,870 6,020

Turnover LKR ('000) 58,657.70 33,121.43 77.37 2,013.28 11.98 39,835.54 123.42 6,110.23 4,285.20 2,239.03 21,557.28 1,343.93 448.90 889.68 18,846.71 453.36

Turnover USD ('000) 463.82 261.90 0.61 15.92 0.09 314.99 0.98 48.32 33.88 17.70 170.46 10.63 3.55 7.03 149.03 3.58

Intraday Intraday High (LKR) Low (LKR) 290.00 975.00 445.00 2,015.00 43.50 124.00 710.00 9.50 168.00 137.00 201.00 61.90 175.00 145.00 225.00 76.30 288.00 950.00 440.40 2,003.00 42.80 121.00 701.10 9.30 167.50 135.00 199.50 60.00 174.50 143.00 222.00 75.00

Close 288.60 974.90 440.80 2,009.00 43.40 123.60 710.00 9.40 167.50 135.20 200.10 61.00 175.00 144.00 224.80 76.00

Price Gainers
Company
NATION LANKA [W 0021] S M B LEASING [X] NATION LANKA SOFTLOGIC FIN VALLIBEL FINANCE

Price Losers
Today 1.20 0.50 11.70 33.50 33.70 Change + 0.80 + 0.10 + 1.70 + 3.50 + 3.10 % Change Company 200.00% 25.00% 17.00% 11.67% 10.13%
G S FINANCE EQUITY ONE PLC PCH HOLDINGS PARAGON SELINSING

Today 598.50 31.00 4.00 1,000.00 1,122.10

Change - 71.50 - 3.30 - 0.40 - 98.20 - 97.90

% Change -10.67% -9.62% -9.09% -8.94% -8.02%

Top 05 Performers for the Day

Company
NATION LANKA CHEVRON JKH NAT. DEV. BANK COLOMBO LAND

Today 11.70 318.10 288.60 177.20 52.60

Pre Day 10.00 315.40 289.00 174.40 51.20

% Change 17.00% 0.86% -0.14% 1.61% 2.73%

Volume (mn) 9.77 0.23 0.20 0.29 0.97

Contribution to Total T/O 4.3% 3.0% 2.4% 2.1% 2.0%

Turnover (LKR) 107,270,019 73,946,777 58,657,705 51,916,872 50,811,046

Most Active
Company
NATION LANKA NATION LANKA[WARRANTS] VALLIBEL PANASIAN POWER OVERSEAS REALTY

Today 11.70 1.20 6.10 2.70 21.00

Pre Day 10.00 0.40 6.10 2.70 20.50

% Change 17.00% 200.00% 0.00% 0.00% 2.44%

Volume (mn) 9.77 6.36 3.34 3.33 2.12

Contribution to Total T/O 4.3% 0.3% 0.8% 0.4% 1.8%

Turnover (LKR) 107,270,019 6,437,709 20,680,940 8,990,930 44,357,908

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 29.05.2013 120.96 20.63 162.61 2.26 1.24 41.39 4.01 33.72 99.67 129.78 4.20 190.06 126.47

Announcements
Dividends
Company John Keells PLC John Keells Holdings PLC Keells Food Products PLC Ceylon Cold Stores PLC Trans Asia Hotels PLC United Motors Lanka PLC 0 0
Company Description

DPS (LKR) 3.50 1.50 2.00 4.00 2.00 4.00 0.00 0.00
Proportion 0

XD Date 06-06-2013 06-06-2013 06-06-2013 06-06-2013 06-06-2013 01-07-2013 00-Jan-00 00-Jan-00

XR Date

Payment Date 17-06-2013 17-06-2013 17-06-2013 17-06-2013 17-06-2013 09-07-2013 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 15,409.4 1,660.1 2,798.2 6,664.0 14,326.5 22,554.9

Change 106.3 10.5 -37.7 -98.0 14.5 -369.3

Change % 0.69% p 0.63% p -1.32% q -1.45% q 0.10% p -1.61% q

Time* 0-Jan 0-Jan 07:00 06:59 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 103.86 94.35 81.29 691.75 1,391.10 22.30 328.60

Change -0.37 -0.66 -0.13 -2.00 11.40 0.11 -2.90

Change % -0.35% q -0.69% q -0.16% q -0.29% q 0.83% p 0.48% p -0.87% q

Time* 07:11 07:11 07:10 07:11 07:11 07:11 07:11

Source: www.bloomberg.com

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CSE Announcements
PC House [PCH: LKR3.2] : Notification on listing of shares (Rights Issue)
Alloted/Listed 114,466,667 Proportion Consideration 1 for 2 LKR3.0 Raised 343,400,001 Date Listed 29.05.2013

Brown and Company [BRWN: LKR126.0]: Mr. N M Prakash informed the Board of his intention to resign from the position holds as Group Managing Director / Chief Executive Officer. Royal Ceramics Lanka [RCL: LKR109.0]: Further to the Announcement made by RCL on 28th May 2013, it is hereby announced that RCL purchased a further 1,592 Ordinary Shares on 28.05.2013 constituting approximately 0,005% of the total shares in issue in Lanka Ceramic, on the CSE. RCL currently holds a total of 22,983,557 shares constituting approximately 76.61% of the total shares in issue in Lanka Ceramic.

Local News
Sri Lanka to sell 30-year long bonds: Sri Lanka is selling 30-year long bonds for the first time this week which fill a need for long term gilts, help better manage the state debt stock and extend a risk free yield curve, officials said. We think it is a good time," Central Bank Nivard Cabraal said. "There will be plenty of long term investors because they know that interest rates would trend down in the future "Then from the governments point of view it will help them to better manage their debt stock, by moving maturities to the higher range." A unit of Sri Lanka's central bank, the department of public debt manages and issues debt for the Treasury. It is offering LKR2.0 bn of 30 year bonds maturing on June 01, 2043 with a coupon of 9.0% at an auction on May 30. [Source: www.lbo.lk] Sri Lanka and China to negotiate free trade deal, expressway funding: Sri Lanka and China will negotiate a free trade deal and Chinese support has been pledged for a planned expressway to the north of the island following a state visit by President Rajapaksa to Beijing. During bilateral meetings, agreement had been reached to set up two committees that will work towards a free trade deal the president s media office said. A target to attract 100,000 Chinese tourists to Sri Lanka has been set. "This would give Sri Lankan products such as apparel, gems and jewelry, tea and rubber wider access in the Chinese market," the statement said. Last year Sri Lanka imported USD2.66 bn of goods from China and exported only USD113 mn in 2012. [Source: www.lbo.lk] Softlogic Finance in LKR500 mn securitization deal: Softlogic Finance [CRL: LKR30.0] announced the conclusion of its latest securitization transaction that will enable the company to access funding of LKR500 mn to grow and develop the business of the company for the current quarter. The transaction, signed recently has drawn considerable interest and full subscription from a number of diverse investors that include commercial banks, development banks and other institutional investors. The tenor of the transaction was for two years and will enable the company to enhance lending volumes in the initial part of the year and potentially gain by re-financing with lower interest rates towards the latter part of the period. The trustee to the transaction was Deutsche Bank AG and lawyers to the issue were Nithya Partners. The transaction was arranged by Liege Capital. The securitization by Softlogic Finance was developed as a stable funding source to push its aggressive business plans with this transaction being the 20th securitization completed by the company. [Source: www.dailynews.lk] Fitch assigns Lion's Debt Final 'AA-(lka)': Fitch Ratings has assigned Sri Lanka-based Lion Brewery (Ceylon) [LION: LKR425.0] listed unsecured redeemable debentures of LKR3bn a final 'AA-(lka)' rating. The LKR3bn includes an additional LKR500m which will be raised in the event of an oversubscription. The agency has also affirmed Lion's National Long-Term rating at 'AA-(lka)' with a Stable Outlook, and affirmed the company's senior unsecured rating at 'AA-(lka)'. The assignment of the final rating to Lion's listed unsecured debentures follows the receipt of final documents which conform to information previously received. The final rating is Softlogic Equity Research Page | 5
5

at the same level as the expected rating assigned on March 25, 2013. The debentures are rated in line with Lion's National Long-Term Rating of 'AA-(lka)', as they rank equally with the company's unsecured creditors. Lion expects to use the debenture proceeds to fund the upgrade and modernisation of its plant over FY13FY14 (financial year ends March). The affirmation of Lion's ratings reflects Fitch's view that the increase in leverage (lease-adjusted debt net of cash/EBITDAR) to 1.85x in FY13from an annualized 1.09x in 9MFY13, is a temporary feature, and that it does not signify a structural weakening in the company's risk profile. [Source: www.dailynews.lk] Amana Takaful distributes surplus to policyholders Amana Takaful [ATL: LKR1.6] announced to its General insurance customers a payment of surplus, which gives Takaful policyholders a proportionate rate from the surplus of the risk fund. As opposed to conventional insurance, the Takaful concept not only benefits claimants but also takes care of non-claimants. Non-claimants receive a proportionate share of the surplus from the risk fund at the end of a defined period. By virtue of being a Takaful policyholder one becomes a participant of the risk pool. The Risk pool meets all claims of the membership among other expenses. In the event of a surplus in the risk pool, non-claimants among the participants are entitled to a proportionate share of the proceeds. With our relentless pursuit to achieve sustainable growth and profits we are delighted to share a surplus in the first year of our revised strategic plan. Non-claimant Takaful policyholders will receive their share of the surplus amounting 12.5% of the residual portion of the risk fund shortly," said Fazal Ghaffoor, Chief Executive Officer, Amana Takaful. "All policyholders will do well to note that this must not be confused with the No Claim Bonus (NCB), which is a feature of any regular Motor insurance policy", he added. [Source: www.island.lk]

Global News
China Growth Outlook Cut by IMF as Decisive Reforms Urged: The International Monetary Fund lowered its forecasts for Chinas growth and said making decisive policy changes would put the economy on a more sustainable path. Expansion will be about 7.75% this year and next, David Lipton, first deputy managing director of the IMF, said today at a press briefing in Beijing after concluding an annual review of China. In April, the IMF forecast growth of 8% this year and 8.2% expansion in 2014. While China still has significant policy space and financial capacity to maintain stability even in the face of adverse shocks, the margins of safety are narrowing and a decisive impetus to reforms is needed to contain vulnerabilities and move the economy to a more sustainable growth path, Lipton said. [Source: www.bloomberg.com] Slowing Thai Growth Aids Government Call for Rate Cut: Thailands central bank may cut its benchmark interest rate today for the first time this year as slowing economic growth bolsters government calls for easing. The Bank of Thailand will probably lower its one-day bond repurchase rate by a quarter of a percentage point to 2.5%, the first reduction since October, according to 15 of 24 economists surveyed by Bloomberg News. One expects a half-point reduction and eight predict no change. The central bank may need to ease to ensure continuity of the economic recovery, said Usara Wilaipich, a Bangkok-based economist at Standard Chartered Plc, who predicts a quarter-point cut. It could also help reduce pressure on the baht to appreciate. But the central bank may also want to consider other macro-prudential measures to reduce concern about the risk of bubbles and other side effects from a rate cut. [Source: www.bloomberg.com]

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Softlogic Equity Research

Dimantha Mathew dimantha.mathew@equity.softlogic.lk +94 11 7277030 Kavindu Ranasinghe kavindu.ranasinghe@equity.softlogic.lk +94 11 7277031 Imalka Hettiarachchi imalka.hettiarachchi@equity.softlogic.lk +94 11 7277032

Softlogic Equity Sales

Dihan Dedigama dihan.dedigama@equity.softlogic.lk +94 11 7277010, +94 77 7689933 Chandima Kariyawasam chandima.kariyawasam@equity.softlogic.lk +94 11 7277058, +94 77 7885778 Sonali Abayasekera sonali.abayasekera@equity.softlogic.lk +94 11 7277051, +94 77 7736059 Thanuja De Silva thanuja.desilva@equity.softlogic.lk +94 11 7277059, +94 77 3120018

Branches
Horana Madushanka Rathnayaka st No. 212, 1 Floor, Panadura Road, Horana madushanka.rathnayaka@equity.softlogic.lk +94 34 7451000, +94 77 3566465 Negambo Krishan Williams No. 121, St. Joseph Street Negambo krishan.williams@equity.softlogic.lk +94 31 2224714-5, +94 77 3569827 Kurunegala Bandula Lansakara No.13, Rajapihilla Mawatha, Kurunegala bandula.lansakara@equity.softlogic.lk +94 37 2232875, +94 77 3615790 Matara Lalith Rajapaksha nd No.8A, 2 Floor, FN Building, Station Road, Matara lalith.rajapaksha@equity.softlogic.lk +94 41 7451000, +94 77 3031159

The report has been prepared by Softlogic Stockbrokers (Pvt) Ltd. The information and opinions contained herein has been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified and no guaranty, representation or warranty, express or implied is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. This document is for information purposes only, descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as, an offer, or solicitation of an offer, to buy or sell any securities or other financial instruments. Softlogic Stockbrokers (Pvt) Ltd may, to the extent permissible by applicable law or regulation, use the above material, conclusions, research or analysis in which they are based before the materialized disseminated to their customeLKRNot all customers will receive the material at the same time. Softlogic Stockbrokers, their respective directors, officers, representatives, employees, related persons and/or Softlogic Stockbrokers, may have a long or short position in any of the securities or other financial instruments mentioned or issuers described herein at any time and may make a purchase and/or sale, or offer t o make a purchase and/or sale of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principal or agent. S oftlogic Stockbrokers may make markets in securities or other financial instruments described in this publication, in securities of issuers described here in or in securities underlying or related to such securities. Softlogic Stockbrokers (Pvt) Ltd may have recently underwritten the securities of an issuer mentioned herein. This document may not be reproduced, distributed, or published for any purposes.

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