Thursday, May 23, 2013

Today 6,488.85 3,666.04 Point Change + 27.23 + 2.06 % Change 0.42 % p 0.06 % 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

15.0% 18.8% 556.0 890.6 20.3 40.6 2,491.7 218.8 257.4 38.6 12.9

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 crosses 6,500, but closes marginally below

CSE Diary for 23.05.2013

ASPI highest since 13th Oct 2011: The bourse renewed its previous high for the year as it surged passed the 6500 psychological barrier towards midday but could not sustain the momentum as it dipped to close with a gain of 27 points at 6488 the highest closing point for the year and highest since 13th Oct 2011. The shortened trading session resulted in lower turnover and activity while Ceylon Tobacco was identified the only major contributor to the index. UML leads turnover with single crossing: United Motors recorded the sole crossing for the day of 1.5mn shares at LKR115.0 (52-wek high off-board price) taking it to the No.1 spot of the top turnover list while its on-board activity was limited. Interest in Overseas Reality further improved as the counter reached a 52-week high price of LKR20.0 while closing slightly below at LKR19.8. Buying sustained in Chevron Lubricants, Laugfs Gas [Voting] and [NonVoting] while the former reached a highest ever price of LKR310 while recording a mid-sized block of 57k.

Heavy interest in selected beverage sector counters: Strong interest that prevailed in the past few days in the beverage sector counters Distilleries and Ceylon Tobacco prevailed today as well as both counters reached their highest ever closing prices of LKR199.9 and LKR951.5. The former registered a 100k block at LKR200.0 as both counters gained 1.9% and 4.6% respectively. Short day brings down retail interest: Retail interest continued to remain low in line with the turnover levels, however considerable retail interest was noted in Overseas Reality, Laugfs Gas and Vallibel One.

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) Apr-13 as at 22.05.2013 YoY Change Annual Avg Week ending 23.05.2013 8.75 9.90 10.86 13.12 -4.51 6.4 8.8

6600 6400 6200

Index

6000
5800 5600 5400

ASPI
3600

Turnover LKR ('mn)

3700 3500 3400 3300 3200 3100

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 6,488.9 3,666.0 556.0 4.4 20.3 235 2,491.7 257.4 38.6 218.8 17.6 2.4 2.1 Today 14,219.8 19,305.4 2,901.1 2,162.1 713.2 3,639.2 648.0 3,178.9 830.9 175.3

Pre Day 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 Pre Day 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

Change % 0.42% p 0.06% p -27.43% -27.43% -0.98% -5.24% 0.42% -27.77% -19.47% -29.06% 0.42% 0.42% 0.00% % Change -0.24% 2.12% -1.05% -0.13% -0.45% 1.22% 1.21% 0.36% 0.60% 0.00% q p q q q p p p p p

Last Week 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 Last Week 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

% WoW Change 3.21% 3.81% -70.44% -70.44% -65.43% -6.75% 3.21% -79.81% -96.75% 157.16% 3.46% 3.29% 0.00% % WoW Change 0.95% 9.76% -2.26% 3.18% -0.05% 0.47% 5.93% 4.14% 0.03% 0.52% 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 10.1% 7.2% 3.5% 4.4% 3.1% 3.9% 2.9% 3.2% 2.2% 2.3% 2.4% 1.2% 1.6% 1.6% 1.5% 1.3%

Volume 32,901 16,072 304 63 15,897 16,925 238 98,053 200 711 181,823 10,840 1,027 2,100 13,618 400

Turnover LKR ('000) 9,662.86 14,996.94 136.75 127.72 685.38 2,098.58 171.27 951.17 34.00 98.29 36,329.00 675.07 179.76 310.80 3,057.35 29.48

Turnover USD ('000) 76.51 118.75 1.08 1.01 5.43 16.62 1.36 7.53 0.27 0.78 287.66 5.35 1.42 2.46 24.21 0.23

Intraday Intraday High (LKR) Low (LKR) 295.00 990.00 449.90 2,040.00 43.80 125.00 720.00 9.80 170.00 138.80 201.00 63.00 176.50 148.00 226.00 73.90 293.00 900.00 445.00 2,002.00 43.00 123.50 715.00 9.70 170.00 135.00 196.20 62.00 175.00 148.00 224.00 73.50

Close 293.80 951.50 445.00 2,037.50 43.10 123.90 716.80 9.70 170.00 138.10 199.90 62.70 176.40 148.00 224.80 73.70

Price Gainers
Company
LAKE HOUSE PRIN. MORISONS SOFTLOGIC FIN MORISONS [X] BIMPUTH FINANCE

Price Losers
Today 112.90 289.90 33.40 170.70 26.60 Change + 12.50 + 29.90 + 3.30 + 12.60 + 1.90 % Change Company 12.45% 11.50% 10.96% 7.97% 7.69%
S M B LEASING TEA SMALLHOLDER ON'ALLY CEYLON LEATHER EQUITY ONE

Today 0.90 49.00 53.50 81.10 32.40

Change - 0.10 - 5.10 - 4.50 - 6.70 - 2.50

% Change -10.00% -9.43% -7.76% -7.63% -7.16%

Top 05 Performers for the Day

Company
UNITED MOTORS OVERSEAS REALTY CHEVRON DISTILLERIES CEYLON TOBACCO

Today 115.00 19.80 300.30 199.90 951.50

Pre Day 115.00 19.80 300.30 199.90 951.50

% Change 0.00% 0.00% 0.00% 0.00% 0.00%

Volume (mn) 1.51 3.76 0.21 0.18 0.02

Contribution to Total T/O 7.0% 3.0% 2.6% 1.5% 0.6%

Turnover (LKR) 173,281,628 74,284,786 64,092,467 36,329,004 14,996,941

Most Active
Company
OVERSEAS REALTY PANASIAN POWER BLUE DIAMONDS[NON VOTING] UNITED MOTORS PC HOUSE

Today 19.80 2.60 1.50 115.00 3.40

Pre Day 19.80 2.60 1.50 115.00 3.40

% Change 0.00% 0.00% 0.00% 0.00% 0.00%

Volume (mn) 3.76 2.39 2.15 1.51 1.05

Contribution to Turnover Total T/O (LKR) 3.0% 74,284,786 0.3% 6,378,875 0.1% 3,219,863 7.0% 173,281,628 0.1% 3,581,976

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 23.05.2013 121.67 20.58 162.16 2.27 1.22 41.62 4.02 33.68 99.68 129.00 4.22 189.78 126.29

Announcements
Dividends
Company Hemas Holdings PLC CIC Holdings PLC 0 0 0 0 0 0
Company Description

DPS (LKR) 0.45 1.00 0.00 0.00 0.00 0.00 0.00 0.00
Proportion 0.5 0.25

XD Date 01-07-2013 02-07-2013 0 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00

XR Date

Payment Date 09-07-2013 10-07-2013 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

Chemanex PLC Scrip Dividend Watawala Plantations PLC Scrip Dividend 0 0 02-07-2013 05-07-2013 1/0/1900 10-07-2013 15-07-2013 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 15,307.2 1,655.4 2,783.1 6,734.3 14,484.0 22,730.3

Change -80.4 -13.8 -51.9 -106.0 -1,143.3 -530.8

Change % -0.52% q -0.83% q -1.83% q -1.55% q -7.32% q -2.28% q

Time* 0-Jan 0-Jan 03:32 03:32 02:28 03:32

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 101.59 93.19 83.40 694.25 1,375.00 22.24 329.20

Change -1.01 -1.09 -0.02 5.75 7.60 -0.23 -8.85

Change % -0.98% q -1.16% q -0.02% q 0.84% p 0.56% p -1.03% q -2.62% q

Time* 03:16 03:16 03:15 03:36 03:15 03:16 03:15

Source: www.bloomberg.com

Softlogic Equity Research

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CSE Announcements
Hemas Holdings [HHL: LKR35.2]: New Employee Share Purchase Scheme 2013. The total number of new shares proposed to be issued by the Company under this scheme is 10,000,000 ordinary shares The share under this scheme will be offered to the eligible employees at a 15% discount on the Volume Weighted Average price of the shares of the Company taking into consideration all share transactions of the Company during the thirty 30 market days immediately preceding the grant date. The Stated Capital of the Company as at date is LKR1,600,603,000 represented by 515,290,620 Ordinary shares. The issue of shares under the proposed Employee Share Purchase Scheme is in compliance with the Listing Rules of the CSE and is subject to the Exchange approving, in principle the issue and listing of shares issued pursuant to such scheme and obtaining shareholder approval, by way of a Special Resolution at an Extraordinary General Meeting. CIC Holdings [CIC: LKR70.0, CIC.X: LKR52.0]: Related Party Transaction
Date of Transaction Name of Related Party Relationship Amount Invoiced Receivable Balance as at end of 31/03/2013 Terms of Transaction Rationale for entering into the transaction 01/04/2012-31/03/2013 Paints & General Industries Ltd Major Shareholder of CIC Holdings ( holds 53.31% of Ordinary shares) LKR556.51 mn LKR166.51 mn In the normal course of business Latex constitutes a major raw material for paint manufacture. CIC supplies latex to Paints & General Industries on credit terms.

Dealings by Directors:
Company Name Relationship Transaction Sale Purchase Sale Quantity 141,921 116,571 500,000 Colombo Land & Development [CLND: LKR51.1] Mr. M. U. M Ali Sabry Director The Lighthouse Hotel [LHL: LKR48.6] Jetwing Hotels Management Services (Pvt) Ltd Common Directors Cargills [CARG: LKR176.4] Anthony A. Page Director Price (LKR) 51.1 48.9-50.0 180.0 Date 22.05.2013 22.05.2013 22.05.2013

Local News
Sri Lanka to re-start refinery on May 24th: Sri Lanka will re-start its 50,000 barrels per day refinery on May 24, after getting a stock of Omani light crude, petroleum minister Anura Yapa said. The refinery has been hit by US sanctions prevented Sri Lanka from importing light crude oil from Iran. The refinery has been built and fine-tuned to operate on Iranian light and Sri Lanka was struggling to find suitable feedstock for the refinery. "We are testing many types of crude," Yapa told reporters Wednesday. "But an Omani blend was the best we could find. But the yield (of light distillates) is still low compared to Iranian light," he said. He said officials were now testing Nigerian and other crudes to find if they could be used. The refinery was closed earlier this month after a stock of crude was delayed. Yapa said the shipper had said they were having engine troubled and could not deliver the stock in time. Yapa also emphasised that since the Sapugaskanda oil refinery had limited capacity of 50,000 barrels, it needed an upgrade. Yet he also backed plans by the Government to build a new refinery, saying both measures were needed to meet demand. Moving on to speculation that the Government would buy back the Trincomalee tank farm from IOC, Yapa stressed that there were no such moves but that they would work with IOC to ensure optimum use would be made of the facility. [Source: www.lbo.lk, www.ft.lk] Cabinet nod for USD800 mn loans: Cabinet approval has been given for nearly USD800 mn worth of projects to continue the Governments infrastructure development. Acting Cabinet Spokes-man and Petroleum Minister Anura Priyadarshana Yapa told media that a Memorandum of Understanding would be signed between the Government and China Development Bank Corporation for USD580 mn to continue infrastructure Softlogic Equity Research Page | 5
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projects in 2013. The Cabinet paper, which was presented by President Mahinda Rajapaksa, outlined that the MoU would be valid for three years and would be used to finance three key projects by the Government. Road development worth USD300 mn, water supply projects up to USD200 mn and a National School of Business Management project using up USD80 mn were listed as the main funnelling points for the cash. In addition Cabinet approved two agreements with the World Bank worth USD205 mn to improve provincial roads.USD105 mn has been allocated to rehabilitate Hulandawa-Kahambana Road in the Uva province. The distance of 14.5 km will be built by Consulting Engineers and Contractors for an amount of LKR742 mn. [Source: www.ft.lk] Emirates to increase flights from Colombo next month: Emirates will increase capacity on its services to Colombo from 30 June 2013, with the addition of three more flights per week, the airline announced yesterday. The addition of three more services, which will operate between Dubai and Colombo on Mondays, Thursdays and Sundays, will increase the number of flights between the two cities to four each day on those days, and take the total number of weekly Emirates flights serving Colombo to 31. The additional Colombo-Dubai flight EK 655 will depart Colombo at 1410hrs and arrive in Dubai at 1655 hrs. The returning Dubai-Colombo flight EK 654 will depart Dubai at 0645 hrs and arrive in Colombo at 1245 hrs. The increase in capacity to Colombo demonstrates Emirates continuing commitment to the destination, said Chandana de Silva, Emirates Area Manager for Sri Lanka and Maldives. [Source: www.ft.lk] HNBs first Green Bank building in Northern Province: Hatton National Bank [HNB: LKR170.0, HNB.X: LKR125.2] recently opened a state-of-the-art green bank building in Jaffna. This is the first green bank building to be opened in the Northern Region and is the second such building built by HNB. The bank is the first Sri Lankan bank to open a green bank building in Nittambuwa in 2011. The new five-story building in Jaffna is an environmentally friendly design and construction maximising resource efficiency throughout its life cycle. The building is equipped with systems for solar power usage for lighting, rain water harvesting systems with treated waste water usage for landscaping, vertical landscaping systems to minimise glare and an automated louvre system, to minimise glare, sunlight and heat along with an intelligent air conditioning system. The building also has an advance BMS (Building Management System) through which the energy efficiency is monitored at a central point. [Source: www.ft.lk] SL banking sector stable due to being strongly capitalized: Sri Lankas banking and financial sectors were stable because they were strongly capitalized, having ample funds for lending and helping the sector to perform well during the recent past, Chief Executive Officer - Multi Finance [MFL :LKR27.2] Ajith Perera said. It was quite visible that our banking and financial sectors were strong due to the prudent risk management system that was in place than any other sector in the country. Therefore, most banks and financial institutes have performed well during the recent past, he said. He said that despite all challenges they were able to survive in the business by going for different strategies to tap the untapped markets in the business. At present, the companys co businesses are leasing, higher purchasing, short to medium term lending, micro financing and trade financing, he said. Due to our prudent risk management system, we were able to survive highly regularized businesses in the country, which focuses on satisfying the customer exceptionally, Perera said. [Source: www.dailynews.lk]

Global News
IMF: UK 'long way from recovery': The UK economy is still a long way from "a strong and sustainable recovery", the International Monetary Fund (IMF) has warned. In its concluding statement on its mission to the UK, the IMF said austerity measures were acting as a drag on the economy. The government could do more to offset the negative impact of austerity with infrastructure spending, it said. George Osborne said the UK would not "duck its economic challenges". The IMF acknowledged that the UK's austerity programme had earned the government international credibility. But speaking at a press conference in London, its deputy managing director, David Lipton, said the view of the IMF was that the UK should consider slowing Softlogic Equity Research Page | 6
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the pace of cuts. "It would be, in our view, useful for the economy for infrastructure and other measures to be brought forward to reduce the drag of austerity measures and provide more support for the economy," he said. [Source: www.bbc.co.uk] Singapores Expansion Reduces Pressure to Ease Policy: Singapores economy unexpectedly expanded last quarter as services and construction strengthened, reducing pressure on the central bank to ease monetary policy to boost growth. Gross Domestic Product rose an annualized 1.8% in the three months through March from the previous quarter, when it grew 3.3%, the Trade Ministry said in a statement today, revising an earlier estimate for a 1.4% contraction last quarter. The median in a Bloomberg News survey was for a 1.2% decline. Theres very little slack in most Asian economies so as the recovery starts to take hold during the second half of the year, this slack would very quickly evaporate and that would begin to build up underlying inflation pressures, said Leif Eskesen, chief economist for India and Southeast Asia at HSBC Holdings Plc in Singapore. We do expect some central bank action on that front. [Source: www.bloomberg.com]

Softlogic Equity Research

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