Monday, April 08, 2013

Today 5,777.38 3,321.81 Point Change + 11.44 + 9.28 % Change 0.20 % p 0.28 % 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

2.4% 7.7% 398.0 796.6 20.2 38.1 2,216.0 34.9 51.3 16.4 5.5

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]

Turnover dips ahead of New Year holidays

CSE Diary for 08.04.2013

ASPI continues its green ride: Colombo stocks settled in the green for yet another day taking the count to 5 consecutive days. As expected with the week falling just before the New Year holidays, turnover and activity of the market dipped with todays turnover recording a mere LKR398mn. However the bourse was on an uptrend supported by Distilleries, Vallibel One and Carsons allowing the index to gain by 11 points. S&P SL20 saw a more volatile path but also gained 9 points. UBC top performer for 2nd consecutive day: Union Bank saw heavy investor interest extending Fridays gains as it reached a new 52-week high price of LKR23.7. A high level of retail interest was noted in the counter as it traded 2.8 mn shares closing on positive note at LKR22.6 (+2.3%). Pan Asia Bank recorded the only off-market deal for the day with 1.1mn shares changing hands at LKR21.0.

BFI stayed steady with continued interest: Banking and finance sector generated turnover but saw some selling pressure in selected counters. Sampath Bank and Commercial Bank which completed their scrip dividend and cash dividend last week generated selling pressure as the former closing flat and latter closing with a dip of 0.4%. Further interest was noted in Nations Trust Bank, National Development Bank and DFCC. Improved retail activity: Retail activity was heavy in Union Bank, but the rest of the market saw a declining trend in the retail segment primarily led by the upcoming holiday season.

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) Mar-13 as at 08.04.2013 YoY Change Annual Avg Week ending 05.04.2013 9.26 10.25 11.35 13.76 -46.71

5800 5750

Index

5700
5650 5600

7.5 8.8

ASPI

Turnover LKR ('mn)

3350 3300

3,000 2,500 2,000 1,500 1,000 500 0

200.0

Volume ('mn)

150.0 100.0 50.0 0.0

Index

3250 3200 3150

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 5,777.4 3,321.8 398.0 3.2 20.2 237 2,216.0 51.3 16.4 34.9 15.6 2.1 2.3 Today 13,313.9 16,186.3 2,683.9 1,903.4 596.9 3,382.3 488.6 2,583.8 804.6 169.1

Pre Day 5,765.9 3,312.5 634.2 5.0 23.9 247 2,211.6 206.8 51.2 155.6 15.6 2.1 2.3 Pre Day 13,373.0 16,113.9 2,666.9 1,893.4 594.7 3,352.6 474.7 2,568.5 810.8 169.7

Change % 0.20% p 0.28% p -37.25% -37.25% -15.34% -4.05% 0.20% -75.21% -67.96% -77.60% 0.20% 0.20% 0.00% % Change -0.44% 0.45% 0.64% 0.52% 0.38% 0.88% 2.92% 0.60% -0.77% -0.35% q p p p p p p p q q

Last Week 5,705.2 3,281.6 403.2 3.2 15.3 219 2,188.3 79.9 19.9 60.0 15.4 2.1 2.3 Last Week 13,054.2 16,040.8 2,669.5 1,889.6 580.5 3,291.1 474.3 2,593.8 791.3 167.3

% WoW Change 1.27% 1.22% -1.28% -1.28% 32.04% 8.22% 1.27% -35.86% -17.60% -41.91% 1.27% 1.27% 0.00% % WoW Change 1.99% 0.91% 0.54% 0.73% 2.83% 2.77% 3.01% -0.39% 1.69% 1.03% 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 9.6% 6.7% 4.0% 4.2% 3.5% 4.0% 3.3% 3.3% 2.3% 2.2% 2.2% 1.2% 1.5% 1.7% 1.6% 1.4%

Volume 49,475 4 80,001 1,629 26,812 62,899 210 88,107 1,380 1,304 601 5,407 100 40,275 75,603 0

Turnover LKR ('000) 12,220.45 3.15 35,600.45 2,850.99 1,127.63 7,141.86 148.22 795.43 224.94 156.25 97.01 299.14 15.30 5,639.03 16,632.96 0.00

Turnover USD ('000) 97.21 0.03 283.20 22.68 8.97 56.81 1.18 6.33 1.79 1.24 0.77 2.38 0.12 44.86 132.31 0.00

Intraday Intraday High (LKR) Low (LKR) 247.50 794.00 450.00 1,774.00 43.00 114.00 712.00 9.20 163.00 120.90 165.00 56.00 153.00 140.90 220.90 0.00 246.90 780.00 445.00 1,749.80 42.00 113.00 705.50 9.00 163.00 119.50 160.60 55.00 153.00 140.00 219.70 0.00

Close 247.00 787.00 450.00 1,750.30 42.70 113.10 712.00 9.10 163.00 119.50 165.00 55.10 153.00 140.20 220.00 71.40

Price Gainers
Company
HUEJAY CEYLON PRINTERS CITRUS KALPITIYA ASIA CAPITAL GESTETNER

Price Losers
Today 68.10 1,050.00 6.20 26.00 179.90 Change + 16.60 + 239.00 + 0.80 + 3.00 + 20.20 % Change Company 32.23% 29.47% 14.81% 13.04% 12.65%
HYDRO POWER NATION LANKA [W 0021] COMM LEASE & FIN LANKEM CEYLON HAPUGASTENNE

Today 6.00 1.10 4.40 141.00 35.00

Change - 0.70 - 0.10 - 0.40 - 12.10 - 3.00

% Change -10.45% -8.33% -8.33% -7.90% -7.89%

Top 05 Performers for the Day

Company
UNION BANK KEGALLE CARSONS PAN ASIA VALLIBEL ONE

Today 22.60 117.00 450.00 20.40 17.50

Pre Day 20.50 112.40 440.20 21.00 16.10

% Change 10.24% 4.09% 2.23% -2.86% 8.70%

Volume (mn) 2.75 0.38 0.08 1.43 1.20

Contribution to Total T/O 2.9% 2.0% 1.6% 1.4% 0.9%

Turnover (LKR) 63,639,481 44,173,810 35,600,450 29,916,850 20,523,052

Most Active
Company
UNION BANK PAN ASIA PC HOUSE VALLIBEL ONE PANASIAN POWER

Today 22.60 20.40 2.90 17.50 2.90

Pre Day 20.50 21.00 2.90 16.10 2.70

% Change 10.24% -2.86% 0.00% 8.70% 7.41%

Volume (mn) 2.75 1.43 1.26 1.20 0.84

Contribution to Total T/O 2.9% 1.4% 0.2% 0.9% 0.1%

Turnover (LKR) 63,639,481 29,916,850 3,672,982 20,523,052 2,384,611

Softlogic Equity Research

Page | 3.

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 08.04.2013 130.48 20.26 163.34 2.29 1.28 41.14 4.00 33.52 101.33 134.50 4.30 192.83 125.71

Announcements
Dividends
Company No Announcements 0 0 0 0 0 0 0
Company Description

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

XD Date 0 0 0 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00

XR Date

Payment Date 00-Jan-00 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 14,565.3 1,553.3 2,600.9 6,273.3 13,192.6 21,718.1

Change -40.9 -6.7 15.7 18.5 359.0 -8.9

Change % -0.28% q -0.43% q 0.60% p 0.37% p 2.80% p -0.04% q

Time* 0-Jan 0-Jan 07:10 07:11 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 105.33 93.62 86.90 703.00 1,576.60 27.21 338.65

Change 1.38 0.98 0.14 4.50 2.30 0.03 4.80

Change % 1.17% p 1.04% p 0.08% p 0.57% p 0.16% p 0.15% p 1.27% p

Time* 07:02 07:07 07:00 07:23 07:02 07:03 07:02

Source: www.bloomberg.com

Softlogic Equity Research

Page | 4.

CSE Announcements
Commercial Credit & Finance [COCR: LKR12.5]: 20 mn ordinary voting shares of the company were listed on the 8th of April 2013 pursuant to a capitalization of reserves in the proportion of 1:10.90371825. National Development Bank [NDB: LKR163.0]: Mr. Rusell de Mel, CEO of NDB will be retiring on 23rd August 2013 and will be resigning from the Board of Directors. Mr. Rajendra Theagarajah will be appointed as the CEO designate w.e.f 1st August 2013 and thereafter as CEO and a Director w.e.f 24th August 2013. East West Properties [EAST: LKR13.2]: The Company wishes to announce that the Board of Directors of Weligama Hotel Properties Limited, a subsidiary of EAST, has informed that Weligama Hotel Properties Limited has proposed to issue 195,000,000 ordinary voting shares to public by way of a private placement, at a price of LKR9.00 per share. The funds raised through this share issue will be utilized to part finance the construction of "Marriott Weligama Bay Resort & Spa". Subsequent to the private placement, EAST will hold 56.66% of the issued share capital of Weligama Hotel Properties Limited. Dealings By Directors
Company DFCC Bank [DFCC: LKR140.2] Name Mr. J M S Brito Relationship Chairman Transaction Sales Quantity 10,000 Price (LKR) 140.0-140.1 Date 08.04.2013

Local News
Sri Lanka's Bank of Ceylon international bond sale begins: An international bond of sale of Sri Lanka's staterun Bank of Ceylon has got underway with an initial price guidance issued to investors by lead managers, a media report said. Bloomberg newswires, citing an un-named source said an initial guidance of 5.5% had been set. The price guidance may be revised later based on demand. The bank said earlier it was looking to raise USD300 to 500 mn through the bond sale. In 2012 Bank of Ceylon sold a USD500 mn 5-year bond to yield 6.875% after setting initial price guidance of 7.1%. Sri Lanka's state-run Bank of Ceylon has sold a USD500 mn 5-year sovereign bond to yield 6.875% a year with the investors oversubscribing the issue 7.7 times. [Source: www.lbo.lk] Sri Lanka invites China to invest in mineral sector: Sri Lanka has asked China to invest in the mineral mining and processing sector for export especially in mineral sands and graphite, the trade ministry said. In recent years Sri Lanka's Treasury has helped expand the trade gap with China by borrowing heavily from its Exim Bank and others (exporting Sri Lanka government debt to China) for infrastructure projects which are tied to Chinese material imports and labour. But ordinary Sri Lankan citizens also import goods from China at a lower cost than from other countries increasing their disposable incomes to purchase more consumer goods, save or invest, thereby generally bettering their lives. "Sri Lanka wants to upgrade its mineral sector," Rishad Bathiudeen, Sri Lanka's minister for trade and commerce was quoted as saying to China's envoy to Colombo Wu Jianghao. "There is considerable scope for partnership for Chinese firms in this sector here. Lankan produced graphite, crystals, and ilmenite are of international standards." Sri Lanka's mineral exports to China rose to USD15.14 mn in 2012 from USD4.47 mn in 2008, the trade ministry said. [Source: www.lbo.lk] Tourism industry fumes over new electricity tariff: The countrys tourism industry has expressed serious reservations over the proposed new electricity tariff, in addition to objecting to it being subjected to a special category. The industrys opposition was conveyed by the Tourist Hotels Association (THASL) at a public hearing on the proposed tariffs organised by the Public Utilities Commission. Speaking on behalf of the industry, THASLs past-president Srilal Miththapala had said the primary objection was that the hotel Softlogic Equity Research Page | 5
5

industry has been categorised under the special tariff scheme and imposed a separate rate structure, higher than the normal industrial tariff. There is no logic whatsoever to consider that hotels are not an industry. In fact, in the current economic climate, tourism is considered to be one of the main thrust industries, driving the post war economic revival, Miththapala pointed out. Just because hotels are perceived to be high-end electricity users, it is wrong to charge us with a higher than the normal punitive tariff, he said, and added: A proper cost-based rate structure was required, than one based on individual consumer categories. [Source: www.ft.lk]

Pakistan firm to put up USD15.5 mn cement plant at Hambantota Port: A new business venture, Thatta Cement Company Ltd. yesterday signed a business venture agreement with the Sri Lanka Ports Authority to construct a cement grinding and bagging plant at Magam Ruhunupura Mahinda Rajapaksa Port. Thatta Cement Company Ltd. is the local subsidiary company of Thatta Cement Company Ltd. in Pakistan. The proposed plant will employ a closed circuit cement grinding mill, cement and packing plant for cement manufacture and dispatch. The total investment is concluded as USD15.15 mn to be incurred during the first five years of operation. This business venture agreement has been signed for a term of 25 years. At the commencement, minimum guaranteed production volume of the plant will be 100,000 Mt/year and it will be increased gradually up to 1,000,000 Mt/year at the end of the first decade. Land allocation for this business venture will be four hectares and that will generate minimum revenue of USD9.9 mn over the 25 years via a land lease agreement. In addition to that by royalty payment SLPA will earn USD65.5 mn over 25 years. SLPA will achieve more benefits via this project as it generates a number of vessel movement at the port. [Source: www.ft.lk] Mobile phone users surpass 20 mn mark: The number of mobile phones used by 20.8 mn Sri Lankans hit over 20.3 mn for the first time at the end of December 31, 2012, Central Bank data showed. As of December 31, 2011, the number of mobile phones used remained at 18.3 mn. At the end of December 2012, Sri Lankas telephone density including both mobile and fixed lines was 116%. In contrast, the number of fixed line telephones in the fourth quarter of 2012 declined 4.4% Year-on-Year to 3.44 mn. The number of internet and e-mail subscribers during the same quarter grew 61.7% YoY to 1.36 mn. [Source: www.dailymirror.lk]

Global News
Cyprus Woes Threaten East Europe Growth, Development Bank Says: Cypruss bailout threatens slowing eastern European growth through trade and banking links if it sparks capital flight from the most indebted euro-area nations, the European Bank for Reconstruction and Development said. Another bout of uncertainty in Europes debt crisis may boost financing costs for banks and potentially trigger an outflow of large deposits and funding in countries with weaker lenders or sovereigns, EBRD Deputy Chief Economist Jeromin Zettelmeyer said in an April 5 interview in London. Eastern Europe relied on foreign capital flows and easy access to credit and export markets to fuel growth of more than 5 percent a year before the global crisis of 2008. The Cyprus bailout, where international creditors forced losses on large depositors in exchange for a EUR10 bn (USD12.8 bn) aid package, may lead to capital flight and weaker growth in countries such as Italy and Spain, Zettelmeyer said. [Source: www.bloomberg.com] Bank of Japan begins stimulus sending Yen lower: The Japanese yen has dropped to its lowest level since 2008 against the US dollar after the central bank began the latest round of its stimulus programme. The yen fell as low as 98.85 against the dollar, before rebounding slightly. Investors said the central bank's plan to buy assets worth trillions of yen, which has government backing, would continue to weaken the currency. As a result, the yen may break through the 100 mark against the dollar as early as this week. "This has really shaken up many people's attitudes toward the Bank of Japan and the new government," said Andrew Wilkinson, chief economic strategist at Miller Tabak and Co in New York. "It feels like it's gathered a whole new momentum behind it, as the doubters have joined the bandwagon and it's becoming a self-fulfilling prophecy." [Source: www.bbc.co.uk] Softlogic Equity Research Page | 6
6

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 7277059, +94 77 7736059 Thanuja De Silva thanuja.desilva@equity.softlogic.lk +94 11 7277053, +94 77 3120018

Branches
Horana Madushanka Rathnayaka No. 101, 1/1, Aguruwathota 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 to 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. Softlogic 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.

Softlogic Equity Research

Page | 7
7