Tuesday, May 07, 2013

Today 6,201.68 3,511.95 Point Change + 80.51 + 50.83 % Change 1.32 % p 1.47 % 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

9.9% 13.8% 1,386.6 843.4 54.4 39.7 2,377.0 248.8 322.5 73.7 9.1

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]

CSE bulls pushes index up 80 points

CSE Diary for 07.05.2013

Bullish sentiment stays strong: The market continued with overwhelming buying interest with most investors actively getting back into the market. A strong uptrend was observed in the index throughout the day as the index surpassed the 6,200 mark closing at 6,201 up 80 points. Gains made in Aitken Spence, John Keells Holdings, Valibel One and DFCC weighted heavily on the index. With blue chips driving the market, the S&P SL20 also recorded heavy gaining rushing up 51 points.

most valuable company in the bourse John Keells Holdings continued to renew its 52-week high to LKR264.8 amidst buying interest despite its expensive valuations. Most of the top slots in the turnover list were booked by banking counters while finance companies also slowly entered the show. National Development Bank (+2.9%), Seylan Bank [Non-Voting] (+1.8%), DFCC (+4.6%) reached 52-week highs while Commercial Bank (+0.5%), Hatton National Bank (+0.9%) and Sampath Bank (+2.3%) also registered perceived investor attention. Retail activity in Vallibel One and Colombo Land: Heavy retail participation was observed across the board with particular interest in Vallibel One which recorded a large gain. Further the retail favorite speculative counter; Colombo Land also grabbed renewed interest as the counter recorded a gain of LKR55.0 (+3.8%).

Vallibel One tops turnover: Interest in Vallibel One has been high in the last few days, while activity in the counter accelerated following the acquisition by its subsidiary Royal Ceramics. The counter recorded 6.1mn shares changing hands as it traded between LKR19.3 and LKR21.8 and closing on the high side at LKR21.4 gaining 12.0%. Royal Ceramics continued to remain active gaining 3.5% to close at LKR104.0. Diversified and BFI Sectors show significant gains: The

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) Apr-13 as at 07.05.2013 YoY Change Annual Avg Week ending 03.05.2013 9.20 11.33 13.55 -7.18 6.4 8.8 10.22

6400 6200

Index

6000 5800 5600 5400

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 6,201.7 3,512.0 1,386.6 11.0 54.4 255 2,377.0 322.5 73.7 248.8 16.8 2.3 2.2 Today 14,017.8 17,404.2 2,866.5 2,051.4 706.1 3,586.2 601.0 2,987.0 809.0 174.7

Pre Day 6,121.2 3,461.1 4,135.6 32.7 67.4 255 2,346.2 123.2 95.0 28.2 16.5 2.3 2.2 Pre Day 13,847.0 17,315.8 2,831.1 2,007.3 695.4 3,528.3 587.3 2,927.8 804.2 174.9

Change % 1.32% p 1.47% p -66.47% -66.47% -19.25% 0.00% 1.32% 161.75% -22.41% 781.52% 1.32% 1.31% 0.00% % Change 1.23% 0.51% 1.25% 2.19% 1.54% 1.64% 2.33% 2.02% 0.61% -0.11% p p p p p p p p p q

Last Week 5,953.2 3,365.8 876.0 6.9 32.2 238 2,280.8 204.0 118.2 85.8 16.1 2.2 2.3 Last Week 13,585.7 16,737.2 2,735.3 1,933.5 680.0 3,475.9 560.4 2,797.0 801.9 171.2

% WoW Change 4.17% 4.34% 58.29% 58.29% 69.06% 7.14% 4.22% 58.04% -37.68% 189.96% 4.22% 4.22% -4.35% % WoW Change 3.18% 3.99% 4.80% 6.09% 3.84% 3.18% 7.25% 6.79% 0.89% 2.07% 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 9.5% 6.5% 3.7% 4.2% 3.2% 4.0% 3.1% 3.3% 2.3% 2.4% 2.3% 1.2% 1.5% 1.7% 1.6% 1.3%

Volume 219,426 11,069 1,649 686 9,372 847,473 321 270,817 388,980 73,375 13,695 9,570 1,130 155,000 260,589 3,357

Turnover LKR ('000) 57,807.83 9,091.28 742.05 1,290.87 397.57 99,862.44 228.34 2,617.02 66,112.78 9,894.19 2,493.60 554.21 180.80 23,185.50 57,423.34 240.96

Turnover USD ('000) 457.21 71.90 5.87 10.21 3.14 789.83 1.81 20.70 522.90 78.26 19.72 4.38 1.43 183.38 454.17 1.91

Intraday Intraday High (LKR) Low (LKR) 264.80 828.70 450.00 1,899.00 43.00 118.60 721.90 9.80 171.00 140.00 185.00 58.00 160.00 152.00 223.00 72.00 261.00 820.00 450.00 1,880.00 42.20 117.20 711.00 9.50 168.50 129.00 180.00 56.00 160.00 147.00 218.00 71.40

Close 264.50 825.00 450.00 1,880.10 42.80 118.50 721.90 9.70 170.00 138.30 181.40 57.90 160.00 150.10 222.10 72.00

Price Gainers
Company
BIMPUTH FINANCE SELINSING BERUWELA WALKINN ABANS CHILAW FINANCE

Price Losers
Today 22.80 1,220.00 74.00 110.00 11.20 Change + 4.80 + 244.80 + 9.00 + 12.80 + 1.30 % Change Company 26.67% 25.10% 13.85% 13.17% 13.13%
SAMSON INTERNAT. MULLERS AMAYA LEISURE N D B CAPITAL FLC HYDRO POWER

Today 87.10 1.60 79.60 475.00 6.10

Change - 10.80 - 0.10 - 4.30 - 24.50 - 0.30

% Change -11.03% -5.88% -5.13% -4.90% -4.69%

Top 05 Performers for the Day

Company
VALLIBEL ONE SEYLAN BANK[NON VOTING] COMMERCIAL BANK NAT. DEV. BANK HNB

Today 21.40 40.30 118.50 180.00 170.00

Pre Day 19.10 39.60 117.90 174.90 168.50

% Change 12.04% 1.77% 0.51% 2.92% 0.89%

Volume (mn) 6.10 2.50 0.85 0.48 0.39

Contribution to Total T/O 5.3% 4.2% 4.2% 3.6% 2.8%

Turnover (LKR) 126,978,783 100,008,805 99,862,443 86,203,245 66,112,776

Most Active
Company
VALLIBEL ONE PIRAMAL GLASS SEYLAN BANK[NON VOTING] PC HOUSE CIFL

Today 21.40 6.70 40.30 3.30 2.60

Pre Day 19.10 6.50 39.60 3.10 2.60

% Change 12.04% 3.08% 1.77% 6.45% 0.00%

Volume (mn) 6.10 2.59 2.50 2.46 2.09

Contribution to Total T/O 5.3% 0.7% 4.2% 0.3% 0.2%

Turnover (LKR) 126,978,783 17,354,876 100,008,805 7,999,699 5,430,570

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 07.05.2013 129.49 20.53 165.33 2.34 1.28 42.57 4.08 33.71 102.69 134.72 4.26 196.54 126.43

Announcements
Dividends
Company No Annoucements 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 14,968.9 1,617.5 2,771.3 6,549.6 14,180.2 23,047.1

Change -5.1 3.1 20.7 28.2 486.2 132.0

Change % -0.03% q 0.19% p 0.75% p 0.43% p 3.55% p 0.58% p

Time* 0-Jan 0-Jan 07:07 07:08 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 105.04 95.69 86.13 708.75 1,459.40 23.65 330.05

Change -0.42 -0.47 -1.26 6.00 -8.60 -0.31 -1.00

Change % -0.40% q -0.49% q -1.44% q 0.85% p -0.59% q -1.27% q -0.30% q

Time* 06:51 06:56 06:51 07:06 06:51 06:51 06:51

Source: www.bloomberg.com

Softlogic Equity Research

Page | 4.

CSE Announcements
Senkadagala Finance : The Colombo Stock Exchange CSE has approved in principle an Application for listing the debt securities of the Company. The debt securities are to be listed on the Main Board of the CSE. 5,000,000 Senior, Unsecured, Redeemable Debentures at an issue price of LKR, 100.00 each (with an option to issue up to a further 5,000,000 Debentures in the event the initial 5,000,000 Debentures are oversubscribed). Dealings by Directors
Company Lanka Ceramic [CERA: LKR120.0] Lanka Ceramic [CERA: LKR120.0] Pan Asia Banking Coporation [PABC: LKR21.0] Name Dr. T Senthilverl Mr. P. S. R. Casie Chitty Mr. W.D.N. H Perera Relationship Director Director Director Transaction Quantity Price (LKR) Sale Purchase Purchase 452,200 275,000 211,899 120.0 55.0 20.9-21.0 Date 06.05.2013 06.05.2013 02.05.2013-06.05.2013

Local News
Sri Lanka tourist arrivals up 7.7% in March, Indian arrivals plunge: Sri Lanka's tourist arrivals rose 7.7% to 98,155 in March 2013 with strong growth from key Western markets and China, but arrivals from India plunged, official data shows. In the first two months of the year arrivals were up 10.9% to 288,798. Arrivals from Western Europe, a key generating market for resort tourist rose 10.5% in March to 44.008 with UK rising 8.8% to 13,088, Germany up 16.3% to 9,145 and France up 7.0% to 6,973. Netherlands rose 12.8% to 3,119, Sweden rose 2.1% to 2,390. After March the Western European market slows. South Asian arrivals fell 6.7% to 19,261 with arrivals from India, Sri Lanka's largest source of arrivals plunging 18.1% to 11,789. Arrivals from Maldives rose 23.1% to 4,742 and visitors from Pakistan fell 5.1% to 1,695. East Asian arrivals rose 12.1% to 11,008 in March with China rising 53% to 2,208. So far this year Chinese arrivals have grown 56.6% to 8,353. Japan also performed strongly rising 43.6% to 2,515 up 21.4% but Singapore fell 35.4% to 1,011 and Malaysia fell 34% to 1,292. In March, Malaysia based budget carrier AirAsia pulled out of Colombo. Arrivals from Eastern Europe rose 19% to 9,635 with Russian arrivals up 38% to 4,143 and visitors from Ukraine up 67% to 3,092. Middle Eastern arrivals fell 3.6% to 3,796. [Source: www.lbo.lk] World merchandise exports show tepid growth for 2012, UN reports: Global merchandise exports grew by only 0.2% in value in 2012 after two years of significant expansion, with a decline among developed countries offset by 3.6% growth among developing countries fuelled by petroleum and gas, according to United Nations figures released. Developed nations registered a 2.75% drop in merchandise exports, with the total global value 2012 reaching USD18.325 trillion, as compared to USD18.292 trillion in 2011, according to the UN Conference on Trade and Development (UNCTAD), which promotes the integration of developing countries into the world economy. But even in the developing world, primary exporters of commodities other than fuels saw exports drop by 2.54%, with the 3.6% growth confined mostly to major petroleum- and gas-exporting nations, which recorded a 5.1% increase, according to UNCTAD. [Source: www.ft.lk] Sri Lanka Jaffna harbhor dredged: State-run Dredging Corporation of India has dredged Sri Lanka's Kankasanthurai Habour in the northern Jaffna peninsular, in a two week operation, India's High Commission (embassy) in Colombo said. A 'trailer suction hopper dredger' had arrived at KKS Harbour on April 19th and had completed the task by May 03 in a USD2.055 mn grant aid project as part of an overall USD25 mn financing to rehabilitate the port. The dredging was the fourth phase following a preliminary survey, geotechnical investigations and wreck removal. Wreck removal had cost USD19.5 mn. Jaffna was caught in a 30 year civil war that ended in 2009. Sri Lanka Ports Authority will now rehabilitated the ports breakwater, build a new pier and also do a final hydrographic survey and prepare a Harbour chart (map) through a line of credit. [Source: www.lbo.lk] Softlogic Equity Research

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 LB Finance and DIMO sign Memorandum of Understanding: A Memorandum of Understanding (MOU) was signed between LB Finance [LFIN: LKR135.5] and Diesel & Motor Engineering [DIMO: LKR514.5] on May 2, 2013, in order to bring advantageous results to the micro finance market of Sri Lanka. According to the MOU, they would introduce a large range of financial benefits to their customers who select LB Finance for the leasing of specified DIMO products under this scheme. The aforesaid customer benefits include competitive down payment schemes, free insurance, free registration services and gift vouchers. This alliance between LB Finance and DIMO, mainly offers the above benefits for highly demanded three DIMO products such as TATA Lokka (Non A/C) for an initial down payment of LKR140,000 with free insurance and free registration, TATA Lokka Super ACE (A/C), for an initial down payment of LKR160,000 with free insurance and free registration and TATA Batti for an initial down payment of LKR5,000/- with free insurance, free registration along with a valuable gift voucher. [Source: www.dailynews.lk] Fitch rates HNBs Subordinated Debt Final A+(lka): Fitch Ratings has assigned Hatton National Bank [HNB: LKR170.0, HNB.X: LKR126.9] (HNB; AA-(lka)/Stable) issue of unsecured subordinated redeemable debentures of up to Rs 4 billion a final National Long-Term rating of A+(lka). The assignment of the final rating follows the receipt of final documents which conform to information previously received. The final rating is at the same level as the expected rating assigned on April 11, 2013. The debentures are rated one notch below HNBs National Long-Term rating of AA-(lka) to reflect their subordinated status. The debentures have a five-year tenor with bullet principal repayment at maturity. Coupon payments are at a fixed rate and paid annually, helping the bank to reduce its exposure to interest rate risk. The debentures do not contain any deferral clauses and therefore Fitch has not assigned any equity credit to this issue. HNB is to use the proceeds to fund its projected lending activities and to strengthen the banks regulatory Tier 2 capital base. [Source: www.dailynews.lk] Increased Chinese investments in Sri Lanka: Chinese Vice-Minister of Commerce Cheng Jiao has informed Economic Development Minister Basil Rajapaksa that China is ready for large and medium scale investments in Sri Lanka with Beijings sponsorship. Vice Minister Jiao who met Minister Basil Rajapaksa during a recent tour of Sri Lanka, said Chinas attention has been drawn to the need for reducing the trade gap between the two countries in order to further strengthen ties. While recalling long years of trade relations between the two countries the Chinese Vice-Minister also noted expansion and improvement of the islands road network and transport facilities. He lauded Sri Lankas high development achievements within four years following the defeat of LTTE terrorism. [Source: www.ft.lk]

Global News
Slow Reforms Cloud Vietnams Economic Growth Outlook, IMF Says: Slow restructuring of Vietnams banks and state companies contributed to the International Monetary Funds decision last week to cut the nations growth forecasts. The IMF lowered its projection for Vietnams growth to 5.2% this year from 5.8% previously and to 5.2% in 2014 from 6.4% in its report on April 29. The reduction of this years forecast is the biggest cut among Southeast Asian countries after Singapore, while the 2014 cut is the biggest downward move for any Asian country, the data showed. The cuts signal that it will be important to carry through with the reforms the government has said it intends to, said Sanjay Kalra, the IMFs Hanoi-based resident representative. Structural reforms have moved a bit slower than one might have expected or is desired. [Source: www.bloomberg.com] Australia's central bank cuts key interest rate to record low: Australia's central bank has cut its benchmark interest rate to a record low, in an attempt to counter slowing growth in the country's mining sector. The Reserve Bank of Australia cuts its key rate to 2.75% from 3%. The bank said it expected investment in the resources sector, one of its biggest drivers of growth in recent times, to peak this year. It added that a rate cut would provide a boost to other areas of the economy and help sustain long-term growth. "There has been a strengthening in consumption and a modest firming in dwelling investment, and prospects are for some increase in business investment outside the resources sector over the next year," the Central Bank said in a statement. " [Source: www.bbc.co.uk] Softlogic Equity Research Page | 6
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