Monday, May 27, 2013

Today 6,446.54 3,641.91 Point Change - 42.31 - 24.13 % Change -0.65 % q -0.66 % q

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

14.2% 18.0% 697.0 895.2 32.3 40.7 2,475.5 113.2 159.8 46.6 13.0

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 struggles to surpass the 6,500 mark

CSE Diary for 27.05.2013

Indices dipped amidst selling pressure: The benchmark index traced a similar trend to its previous sessions as it crossed the 6,500 mark during early trading while selling pressure weighed on investor sentiment leading the index to close 42 points down from an intra-day high of 6,528.11 points. Losses made in John Keells Holdings (1.7%), Dialog Axiata (-3.1%), Nestle Lanka (-1.0%) and Commercial Bank (-1.1%) were the major negative contributors to the index. The S&P SL20 index followed a similar pattern as it dipped 24 points at its close denoting losses in heavyweights. Diversified sector led the bourse with continued interest in JKH: Investors continued to focus on John Keells Holdings however on-board interest weighed largely on the selling side as it dipped 1.7% at its close of LKR288.9. The counter saw an off-board block of 103k shares which was transacted at LKR290.0. S&P players; Carsons Cumberbatch and Distilleries highlighted the crossings board with one block each at LKR435.0 and LKR205.0 respectively. The latter touched a new 52-week high of LKR207.0 (+3.6%) on thin volume before closing with a

marginal gain at LKR200.0. Interest in Overseas Realty persisted as it continued to trade at a 52-week high of LKR20.9 while a block of 1 mn shares in the counter was crossed off at LKR20.0. Heavy interest in Laugfs Gas Voting & Non-Voting: Notable interest was seen in Laugfs Gas Voting and NonVoting. The latter trades at a trailing PER of 7.3x at current price, below its sector PER of 9.8x. Chevron Lubricants Lanka continued to attract buying interest with its price appreciating 4.8% at its close of LKR314.7. Renewed interest was seen in Environmental Resources Investments as a block of c.4.2 mn shares was transacted on-board at LKR16.8. Main focus of the BFI sector surrounded National Development Bank which traded between LKR174.0 and LKR176.0. Retail activity at a moderate pace: Retailers continued to be watchful amidst the downtrend of indices however notable interest was seen in Environmental Resources Investments, Laugfs Gas Voting and NonVoting and Overseas Realty.

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) Apr-13 as at 27.05.2013 YoY Change Annual Avg Week ending 23.05.2013 8.75 10.86 13.08 -7.16 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

150.0

Volume ('mn)

Index

3500

100.0 50.0 0.0

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 6,446.5 3,641.9 697.0 5.5 32.3 250 2,475.5 159.8 46.6 113.2 17.5 2.4 2.1 Today 14,099.5 19,321.4 2,896.7 2,132.8 708.5 3,614.3 647.5 3,202.4 825.1 172.4

Pre Day 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 Pre Day 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

Change % -0.65% q -0.66% q 25.35% 25.35% 59.65% 6.38% -0.65% -37.92% 20.63% -48.26% -0.65% -0.65% 0.00% % Change -0.85% 0.08% -0.15% -1.36% -0.66% -0.68% -0.08% 0.74% -0.70% -1.68% q p q q q q q p q q

Last Week 6,466.7 3,649.4 1,282.7 10.2 44.0 254 2,483.2 350.9 62.5 288.4 17.6 2.4 2.1 Last Week 14,300.5 18,589.2 3,004.5 2,178.8 715.6 3,627.7 635.2 3,142.5 843.6 178.7

% WoW Change -0.31% -0.20% -45.66% -45.66% -26.55% -1.57% -0.31% -54.46% -25.48% -60.74% -0.31% -0.31% 0.00% % WoW Change -1.41% 3.94% -3.59% -2.11% -0.99% -0.37% 1.93% 1.91% -2.19% -3.51% 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% 7.3% 3.5% 4.4% 3.1% 3.9% 3.0% 3.1% 2.2% 2.2% 2.4% 1.2% 1.6% 1.6% 1.5% 1.3%

Volume 319,066 1,766 48,226 219 1,572 20,145 917 671,676 1,223 4,310 194,834 24,467 13,800 10,050 29,375 4,096

Turnover LKR ('000) 92,890.55 1,692.70 20,981.63 441.65 68.21 2,472.06 659.19 6,344.15 206.51 586.04 39,761.73 1,505.60 2,415.32 1,474.22 6,580.93 305.21

Turnover USD ('000) 735.45 13.40 166.12 3.50 0.54 19.57 5.22 50.23 1.64 4.64 314.81 11.92 19.12 11.67 52.10 2.42

Intraday Intraday High (LKR) Low (LKR) 294.90 980.00 448.00 2,040.00 44.50 124.00 720.00 9.80 170.00 139.80 207.00 62.90 176.10 148.00 225.50 75.00 288.10 926.60 445.00 2,015.00 42.90 122.00 716.00 9.30 168.00 135.60 200.00 61.00 175.00 146.00 222.50 72.50

Close 288.90 960.00 445.00 2,016.40 43.00 122.50 719.00 9.40 168.00 136.00 200.00 62.50 175.00 146.00 223.40 72.60

Price Gainers
Company
MULTI FINANCE CEYLON LEATHER AMF CO LTD EQUITY ONE PLC CARGO BOAT

Price Losers
Today 29.70 87.00 393.00 34.50 127.30 Change + 2.50 + 5.90 + 26.60 + 2.10 + 7.30 % Change Company 9.19% 7.27% 7.26% 6.48% 6.08%
NATION LANKA [W 0021] SAMSON INTERNAT. BERUWALA RESORTS UNION CHEMICALS E B CREASY

Today 0.60 90.20 2.20 466.70 1,225.30

Change - 0.60 - 9.80 - 0.20 - 41.30 - 104.40

% Change -50.00% -9.80% -8.33% -8.13% -7.85%

Top 05 Performers for the Day

Company
JKH ENVI. RESOURCES OVERSEAS REALTY LAUGFS GAS[NON VOTING] DISTILLERIES

Today 288.90 16.50 20.00 22.60 200.00

Pre Day 293.80 16.70 19.80 22.70 199.90

% Change -1.67% -1.20% 1.01% -0.44% 0.05%

Volume (mn) 0.32 4.47 3.17 2.09 0.19

Contribution to Total T/O 3.8% 3.0% 2.6% 1.9% 1.6%

Turnover (LKR) 92,890,548 75,088,501 63,923,965 48,183,948 39,761,735

Most Active
Company
ENVI. RESOURCES OVERSEAS REALTY NATION LANKA[WARRANTS] LAUGFS GAS[NON VOTING] S M B LEASING

Today 16.50 20.00 0.60 22.60 0.90

Pre Day 16.70 19.80 1.20 22.70 0.90

% Change -1.20% 1.01% -50.00% -0.44% 0.00%

Volume (mn) 4.47 3.17 2.22 2.09 1.67

Contribution to Total T/O 3.0% 2.6% 0.1% 1.9% 0.1%

Turnover (LKR) 75,088,501 63,923,965 1,929,023 48,183,948 1,504,601

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 27.05.2013 121.60 20.61 163.26 2.27 1.25 41.61 4.03 33.68 99.90 131.27 4.22 191.05 126.30

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 15,303.1 1,649.6 2,784.6 6,654.3 14,142.7 22,686.1

Change 8.6 -0.9 20.3 -42.5 -469.8 67.4

Change % 0.06% p -0.06% q 0.74% p -0.63% q -3.22% q 0.30% p

Time* 0-Jan 0-Jan 06:56 11:35 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 102.38 93.58 81.49 697.50 1,391.90 22.62 330.25

Change -0.26 -0.57 -0.29 -5.75 5.30 0.12 0.70

Change % -0.25% q -0.61% q -0.35% q -0.82% q 0.38% p 0.55% p 0.21% p

Time* 06:40 06:40 14:30 14:15 06:40 06:39 06:39

Source: www.bloomberg.com

Softlogic Equity Research

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CSE Announcements
Serendib Engineering [IDL: LKR175.0]: The company informs that Samuel Clive De Silva has been appointed as the CEO of the company. Dialog Axiata [DIAL: LKR9.3]: The company informs that it has entered in to a binding contract with Sri Lanka Cricket becoming the Official Sponsor for both the Mens and Womens National Cricket Team for a 3 year period amounting to LKR753,900,000/-.

Local News
Local construction industry calls to trim foreign presence: Sri Lankas construction sector professionals recently called to cut down the number of foreign consultants, contractors and labourers employed in mega infrastructure projects taking place in the country, stressing the practice has proved detrimental to the local construction industry. Terming the mega construction projects which include ports, highways and airports that are being undertaken by the government futuristic, Chamber of Construction Industry Sri Lanka (CCISL) President Surath Wickramasinghe grieved over the reluctance of authorities to allow local construction sector professionals to get involved in these projects. According to Wickramasinghe, the CCISL has been appealing on a regular basis to the Treasury to include in their contracts with donor funding organisations a substantial portion of the work to the local construction industry. [Source: www.dailiymirror.lk] Sri Lanka on track to achieve MDGs: ADB: With 2 years to go for the 2015 Millennium Development Goal (MDG) deadline, Sri Lanka appears to have made notable progress in many fronts, particularly in areas of achieving universal primary education enrollment and water supply & basic sanitation (WSS), Asian Development Bank (ADB) showed. Latest report released by the multilateral lender noted that average progress score in achieving universal primary education enrollment & continuing schooling until the last grade (identified as MDG 2) in Sri Lanka was on track despite the South Asian sub-region lagging behind other regions on this indicator. MDG 2 is on track, but progress on school completion is slow. The region does well in terms of universal primary education enrollment, with 28 of the 45 countries found to be early achievers. However, almost half of the countries in the region were already well positioned to meet the target, given the existing high levels of enrollment, ADB commented on the regional progress. However, the report emphasized that quality of education was clearly an enduring problem for much of the region. [Source: www. dailiymirror.lk] Sri Lanka post-war growth shift smaller: A post-war growth spurt is temporary and there was no 'structural shift' to eight% a year from six, needing policy changes, an economist said, echoing a call by the International Monetary Fund to improve policy. "What the IMF is saying is that in the medium term instead of an 8.0% growth we will see a 6.8% growth, and any booms and busts along that 6.8% growth path. "If we are to have 8.0% growth there has to be serious adjustments in fiscal policy. Critics say Sri Lanka's rulers are now recreating the types of interventionist policies that reduced economic and civil freedoms of citizens and undermined the island's prospects after gaining independence from Britain, adding an accelerating deterioration of rule of law to the mix. [Source: www.lbo.lk] Sri Lanka state, SOE, bank borrowings top Rs100bn in March: Bank credit to Sri Lanka's state enterprises and central government surged to LKR 100.6bn in March 2013 from LKR36.7bn a month earlier, official data shows, perhaps the highest ever in a single month. The central government borrowed LKR65.1bn from the banking system including LKR20bn in Central Bank credit (printed money), while state owned enterprises borrowed another LKR33.5bn, indicating the pressure on state finances. About 30bn LKR of SOE credit came from foreign currency banking units in March, data from the Central Bank showed. In April state-run Bank of Ceylon borrowed USD 500 mn from an international bond easing pressure on domestic credit markets. From Softlogic Equity Research Page | 5
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May electricity prices have been raised and there has also been good rainfall, which will help cut state enterprise losses. It is not clear whether the March borrowings are for current year spending, due to revenue shortfalls, or to even partly cover arrears from last year. [Source: www.lbo.lk] April plucks highest ever tea crop: Sri Lanka's tea production for the month of April of 33.5mn kilos was the highest ever surpassing the previous best of 32.2mn kilos recorded in the same month of 2005, according to Forbes and Walker Tea Brokers. It said the April 2013 production showed a growth of 3.5mn kilos vis--vis 30.05mn kilos achieved a year earlier. All elevations have shown a growth YOY with High growns in particular showing a growth of 18% vis--vis 2012. Cumulative crops between January and April of 115.04mn kilos too showed a 10mn kilo growth in comparison to the corresponding period of last year. High and Medium-grown elevations showed a growth vis--vis the corresponding period of 2012, whilst, Low-growns showed a marginal decline. [Source: www.ft.lk]

Global News
Durable goods orders point to factory resilience: Orders for long-lasting U.S. manufactured goods rose more than expected in April, a hopeful sign that a sharp slowdown in factory output could soon run its course. New orders for durable goods, which range from toasters to aircraft, increased 3.3% last month, the Commerce Department said on Friday. The data was the latest to show the U.S. economy exhibiting surprising resilience in the face of harsh fiscal austerity measures enacted this year. "(It's) another sign that growth is holding up quite well," said Paul Ashworth, an economist at Capital Economics in Toronto. While Washington hiked taxes in January and sweeping budget cuts began in March, consumer spending has looked relatively robust and many economists think the U.S. Federal Reserve could begin tapering a monetary stimulus program by the end of the year. [Source: www.reuters.com] Jobs, housing data show economy has some muscle: The number of Americans filing new claims for unemployment benefits fell last week, pointing to resilience in the labor market despite belt-tightening by Washington. The improving employment picture is helping to prop up housing, with rising home prices keeping domestic consumption supported, limiting the drag from tighter fiscal policy that is dampening factory activity. "All the eggs are in housing and the consumers' baskets this quarter. Outside that, there is going to be little support to growth," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. Initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 340,000 last week, the Labor Department said on Thursday. Economists had expected claims to fall to 345,000. [Source: www. reuters.com]

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