Friday, December 06, 2013

Today 5,810.24 3,183.09 Point Change + 29.66 + 21.47 % Change 0.51 % p 0.68 % 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

3.0% 3.2% 779.8 834.9 74.3 37.8 2,417.3 126.5 272.6 146.2 22.9

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]

Strong gains led by blue chips

CSE Diary for 06.12.2013

Blue-chips push index higher: The benchmark index was on an upward trend with strong gains towards mi-day as the ASPI rose 30 points. Primarily Nestle pushed the index towards positive territory while Hayleys and Carsons also supported the index. S&P SL20 saw a similar movement with the index closing with a gain of 21 points. Crossings contribute 48% to turnover: The day saw 4 crossings taking place. Commercial Leasing witnessed 2 crossings accounting for 46mn shares at LKR5.0 while some on-board activity was also noted. Further crossings were recorded in Nestle and John Keells Holdings with the former registering 50k shares changing hands at LKR2,250.0. The latter recorded 150k shares being dealt at LKR210.0. Strong on-board interest was also witnessed in both counters with the counters recording healthy gains of 15.3% and 0.2% respectively.

Considerable buying interest was noted in Expolanka which reached a 52-week high for the day of LKR7.7 while 9.3mn shares were traded during the day. The counter saw large on-board blocks of 1mn and 5.4mn shares being traded at LKR7.5. Both Warrants of John Keells Holdings W0022 and W0023 were active with both counters entering the top turnover list while W0023 recording a 52-week high price of LKR75.5. Retail activity on the rise: Retail investor interest improved during the day with most retail activity being witnessed in Expolanka, JKH Warrants and Laugfs Gas [Non-Voting].

Heavy interest in Expolanka and JKH [Warrants]:

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) Nov-13 as at 05.12.2013 YoY Change Annual Avg Week ending 06.12.2013 7.97 9.50 10.54 -21.54 5.6 7.3 8.65

5900 5850

Index

5800 5750 5700 5650

ASPI
3220

Turnover LKR ('mn)

3240 3200 3180 3160 3140 3120

2,000 1,500 1,000 500 0

200.0

Volume ('mn)

150.0 100.0 50.0 0.0

Index

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 5,810.2 3,183.1 779.8 6.0 74.3 266 2,417.3 272.6 146.2 126.5 15.0 2.0 3.0 Today 12,658.3 19,905.1 2,688.0 1,716.1 697.0 3,164.2 535.9 2,819.2 700.4 157.9

Pre Day 5,780.6 3,161.6 1,321.6 10.1 116.4 211 2,405.0 607.2 315.1 292.1 14.9 2.0 3.0 Pre Day 12,735.1 19,380.8 2,689.0 1,699.3 697.5 3,173.3 538.6 2,805.2 701.6 158.7

Change % 0.51% p 0.68% p -40.99% -40.99% -36.12% 26.07% 0.51% -55.10% -53.61% -56.71% 0.52% 0.57% 0.00% % Change -0.60% 2.71% -0.04% 0.99% -0.06% -0.29% -0.50% 0.50% -0.16% -0.51% q p q p q q q p q q

Last Week 5,775.1 3,174.6 254.1 1.9 37.8 211 2,402.7 68.6 32.3 36.3 15.0 2.0 3.0 Last Week 12,589.9 18,950.0 2,730.9 1,726.2 698.0 3,179.3 540.7 2,821.1 710.5 161.3

% WoW Change 0.61% 0.27% 206.89% 206.89% 96.84% 26.07% 0.61% 297.38% 352.59% 248.28% 0.17% 0.44% 0.00% % WoW Change 0.54% 5.04% -1.57% -0.59% -0.13% -0.47% -0.88% -0.07% -1.42% -2.13% 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 8.6% 8.6% 2.9% 5.0% 2.8% 3.8% 2.6% 3.0% 1.9% 1.8% 2.4% 1.4% 1.4% 1.3% 1.2% 1.2%

Volume 320,128 647 135 75,119 1 18,294 70 1,166,565 4,143 6,285 169,308 101,448 1 12,806 1,257 3

Turnover LKR ('000) 67,298.94 722.31 48.57 168,333.44 0.04 2,103.83 43.37 10,498.48 594.82 660.35 32,135.98 7,122.80 0.15 1,562.20 208.56 0.20

Turnover USD ('000) 514.39 5.52 0.37 1,286.62 0.00 16.08 0.33 80.24 4.55 5.05 245.62 54.44 0.00 11.94 1.59 0.00

Intraday High (LKR) 212.00 1,140.00 360.00 2,254.60 37.60 115.50 620.00 9.00 144.00 105.30 190.00 73.00 146.50 122.40 166.00 67.90

Intraday Low (LKR) 210.00 1,100.00 350.00 1,970.00 37.60 114.50 615.10 8.90 143.30 104.50 186.00 69.00 146.50 121.50 165.50 66.50

Close 210.50 1,107.40 359.80 2,249.90 37.60 115.00 619.80 9.00 143.40 105.00 189.80 69.50 146.50 122.00 166.00 67.90

Price Gainers
Company
RAMBODA FALLS SIGIRIYA VILLAGE NESTLE S M B LEASING HAYLEYS

Price Losers
Today 14.90 60.80 2,249.90 0.80 318.90 Change + 2.40 + 8.80 + 299.90 + 0.10 + 33.80 % Change Company 19.20% 16.92% 15.38% 14.29% 11.86%
LANKA CENTURY [W 0003] S M B LEASING [X] MORISONS GESTETNER HUEJAY

Today 0.30 0.30 225.10 125.20 53.00

Change - 0.10 - 0.10 - 64.90 - 19.80 - 6.90

% Change -25.00% -25.00% -22.38% -13.66% -11.52%

Top 05 Performers for the Day

Company
COMM LEASE & FIN NESTLE EXPOLANKA JKH DISTILLERIES

Today 4.00 2249.90 7.50 210.50 189.80

Pre Day 3.90 1950.00 7.50 210.00 189.00

% Change 2.56% 15.38% 0.00% 0.24% 0.42%

Volume (mn) 46.35 0.08 9.33 0.32 0.17

Contribution to Total T/O 9.6% 7.0% 2.9% 2.8% 1.3%

Turnover (LKR) 231,413,662 168,333,442 70,006,329 67,298,944 32,135,975

Most Active
Company
COMM LEASE & FIN EXPOLANKA S M B LEASING PCH HOLDINGS DIALOG

Today 4.00 7.50 0.80 1.30 9.00

Pre Day 3.90 7.50 0.70 1.40 9.00

% Change 2.56% 0.00% 14.29% -7.14% 0.00%

Volume (mn) 46.35 9.33 2.17 1.89 1.17

Contribution to Total T/O 9.6% 2.9% 0.1% 0.1% 0.4%

Turnover (LKR) 231,413,662 70,006,329 1,733,126 2,469,338 10,498,479

Softlogic Equity Research

Page | 3.

Currency Board
Local - Indicative Rate against LKR
Currency Australia China EU India Japan UK USA Dollar Yuan Euro Rupee Yen Pound Dollar Indicative Rate 06.12.2013 118.51 21.50 178.80 2.12 1.28 213.69 130.83

CSE Announcements
Dividends
Company Central Finance Company PLC Vidullanka PLC 0 0 0
Company Description

DPS (LKR) 0.85 0.08 0.00 0.00 0.00

Proportion 0 0

XD Date 17-12-2013 17-12-2013 0 00-Jan-00 00-Jan-00

XR Date

Payment Date 19-12-2013 27-12-2013 1/0/1900 00-Jan-00 00-Jan-00

Renunciation

Rights Issues / Scrip Dividend / Sub division / Capitalization

0 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

New Listing
Company No New Listings 0 Type of Security Code 1/0/1900 1/0/1900 Board 1/0/1900 1/0/1900 Offer Price 0.00% 0.00%

Key Corporate Diclosures

NTB Debenture Issue of 30mn at LKR100.0 has been approved in principle by the CSE.

Material Dealings by Related Parties of Listed Companies

Company VIDULLANKA Name Dr. T. Senthilverl 0 Relationship Director 0 Transaction Purchase 0 Quantity 2,050,000 0 Price (LKR) 3.60 0.00 Date 03&04.04.2013 0

Global Markets
Index AMERICA Dow Jones Industrial Average EUROPE EURO STOXX 50 Price EUR FTSE 100 Index ASIA Nikkei 225
* Time is as at ET

Value 15,821.5 2,963.3 6,523.4 15,299.9

Change -68.3 10.1 25.1 122.4

Change % -0.43% q 0.34% p 0.39% p 0.81% p

Time* 16:30 05:38 05:39 01:28

Source: www.bloomberg.com

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

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

Price 97.31 78.93 654.25 1,229.00 324.60

Change -0.07 0.08 2.25 -2.90 1.65

Change % -0.07% q 0.10% p 0.35% p -0.24% q 0.51% p

Time* 05:27 05:22 05:46 05:26 05:26 Page | 4.

Source: www.bloomberg.com

Softlogic Equity Research

TOP STORIES
Local
Eight new economic zones in 2014 An upbeat Board of Investment (BOI) is planning to start a record eight export processing and industrial zones scattered around the country, earmarked to begin operations in 2014. A report released by the BOI states that the new zones will aim to attract local and foreign investment, resulting in more employment. One of the largest zones will be the Mirijjawila Export Processing Zone that will cover 229 hectares of land. According to the BOI, 109 hectares have already been allocated for various projects. [Source: www.ft.lk] Sri Lanka warned on negative effects of import substitution Sri Lanka's drive towards trade restrictions and import substitution may hurt the country, as autarky has consistently failed elsewhere, an International Monetary Fund official has warned. "It is not a matter of opinion. It is not a matter of IMF doctrine," IMF resident Koshy Mathai told reporters in Colombo. "It is simply a matter of fact. So I think we have to be very careful when it comes to import tariffs meant to protect a whole number of different industries." "The increase in export and import taxes, we think will go against the direction of trade liberalization and competitiveness," Mathai [Source: www.lbo.lk] Sri Lanka's Cinnamon Air expands network Cinnamon Air, a domestic Sri Lanka based airline said it had added a sixth destination to its network with scheduled services started to Sigiriya. The flight from Sri Lanka's international airport in Katunayake will use Cessna 208B Grand Caravan aircraft. Cinnamon Air said the 30 minute flight will reduce travel time from the capital to Sri Lanka's 'Cultural Triangle' area of ancient capitals and monuments by over three hours. [Source: www.lbo.lk] Foreign firm buys 10% of Ceylon Grain Foreign investor Japfa Holdings Ltd. yesterday bought a 10% stake amounting to 6.05 million shares of Ceylon Grain Elevators. The purchase was done at Rs. 36 per share in a deal worth Rs. 216 million.

[Source: www.ft.lk]

Global
Germany raises growth forecasts Germany's central bank, the Bundesbank, has raised its forecasts for economic growth in the country. It announced it had raised its forecast for growth this year from 0.3% to 0.5% and for 2014 from 1.5% to 1.7%. "The German economy is in good shape: the unemployment rate is low, employment is rising, and wage growth is returning to normal," said Bundesbank president Jens Weidmann. The Bundesbank makes forecasts twice a year - the last set was in June. [Source: www.bbc.co.uk] ECB Should Use QE to Combat Deflation Risk, Says Eichengreen The European Central Bank should fight the threat of deflation with U.S.-style bond purchases, said U.S economics professor Barry Eichengreen. The Europeans have a real deflation problem and the ECB is not on the case, Eichengreen, a professor at the University of California, Berkeley, said in an interview in Wellington today. I think they should do a version of quantitative easing that is tailored to European circumstances. [Source: www.bloomberg.com] Softlogic Equity Research Page | 5.

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

Branches Softlogic Equity Sales

Dihan Dedigama dihan.dedigama@equity.softlogic.lk +94 11 7277010, +94 77 7689933 Eardley Kern Horana Madushanka Rathnayaka No. 212, 1st Floor, Panadura Road, Horana madushanka.rathnayaka@equity.softlogic.lk +94 34 7451000, +94 77 3566465 Negombo Krishan Williams No. 121, St. Joseph Street Negombo 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

l.kern@equity.softlogic.lk
+94 11 7277053, +94 77 7348018 Chandima Kariyawasam chandima.kariyawasam@equity.softlogic.lk +94 11 7277058, +94 77 7885778 Thanuja De Silva thanuja.desilva@equity.softlogic.lk +94 11 7277059, +94 77 3120018

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 | 6.