Thursday, June 20, 2013

Today 6,211.44 3,492.14 Point Change + 2.21 - 3.54 % Change 0.04 % p -0.10 % 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

10.1% 13.2% 3,475.9 933.6 23.1 40.5 2,385.5 -183.0 2,826.4 3,009.4 15.9

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 remains dull despite heavy turnover by JKH

CSE Diary for 20.06.2013

Indices trading on a range: The bourse heavily consolidated on a 20 points restricted band during most part of trading hours. However turnover was heavy today due to large-sized off-board block transacted on JKH. At the end of the day ASPI settled at 6,211.44 with a marginal gain of 2 points. Gains recorded on John Keells Holdings (+1.7%), Ceylon Cold Stores (+9.3%) and losses denoted on Dialog Axiata (-1.1%) and Carsons Cumberbatch (0.7%) held the indices on marginal ground. John Keells Holdings spearheaded the daily turnover: John Keells Holdings spearheaded turnover adding 80.0% to the daily turnover backed by two large-sized off-board transactions amounting to 10.1mn shares which were dealt at LKR265.0. The counter witnessed notable on-board interest as well led by a single transaction of 174k shares which was traded at LKR270.0. JKH closed at LKR269.5 with an intra-day gain of 1.7%.

Commercial Bank too denoted off-board interest with four crossing totaling to 2.7mn which was transacted at LKR115.70-80. Carsons Cumberbatch and Distilleries Company followed up with smallsized off-board transactions during the day. BFI sector attain investor attention: Banking sectors counters Sampath Bank, Commercial Bank and Nations Trust Bank denoted on-board interest during the day. Sampath Bank witnessed a single on-board transaction of 100k shares which was traded at LKR209.0. SAMP further dipped today by 1.2% and closed at LKR208.1. Commercial Bank and Nations Trust Bank too dipped by 0.3% and 1.9% respectively to settle at LKR115.8 and LKR63,5. Low Retail activity Retail activity was low and concentrated on selected counters Environmental Resources Investments and Janashakthi Insurance.

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) May-13 as at 20.06.2013 YoY Change Annual Avg Week ending 21.06.2013 8.66 9.80 10.85 12.69 -14.95 7.3 8.8

6600 6500 6400

Index

6300
6200 6100 6000

ASPI
3650

Turnover LKR ('mn)

3700 3600 3550 3500 3450 3400

4,000 3,000 2,000 1,000 0

60.0 50.0 40.0 30.0 20.0 10.0 0.0

Volume ('mn)

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 6,211.4 3,492.1 3,475.9 27.1 23.1 241 2,385.5 2,826.4 3,009.4 -183.0 16.9 2.3 2.2 Today 13,470.6 19,162.7 2,862.6 2,041.2 676.3 3,502.2 612.9 3,085.9 796.1 162.2

Pre Day 6,209.2 3,495.7 343.8 2.7 12.7 239 2,384.6 155.5 91.3 64.2 16.9 2.3 2.2 Pre Day 13,515.9 19,138.4 2,885.5 2,030.6 677.3 3,502.2 616.6 3,081.4 790.5 162.5

Change % 0.04% p -0.10% q 910.94% 910.94% 81.88% 0.84% 0.04% 1717.61% 3197.79% -384.88% 0.04% 0.03% 0.00% % Change -0.34% 0.13% -0.79% 0.52% -0.15% 0.00% -0.60% 0.15% 0.71% -0.19% q p q p q p q p p q

Last Week 6,207.9 3,499.1 480.0 3.7 25.0 237 2,384.0 67.7 24.9 42.8 16.9 2.3 2.2 Last Week 13,608.3 18,813.9 2,918.4 2,028.7 689.8 3,500.8 617.8 3,128.0 804.5 163.8

% WoW Change 0.06% -0.20% 624.12% 624.12% -7.76% 1.69% 0.06% 4075.73% 12009.38% -527.27% 0.06% 0.06% 0.00% % WoW Change -1.01% 1.85% -1.91% 0.61% -1.96% 0.04% -0.80% -1.35% -1.04% -0.99% 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 9.7% 7.9% 3.6% 4.3% 3.1% 3.9% 3.0% 3.0% 2.2% 2.3% 2.4% 1.2% 1.6% 1.5% 1.5% 1.3%

Volume 10,478,149 811 200,005 119 3,400 3,078,612 32 77,126 39,416 12,385 218,017 12,866 6,511 293 240,929 21

Turnover LKR ('000) 2,777,608.34 817.06 89,002.20 227.41 139.67 356,536.50 22.41 671.14 6,413.37 1,669.83 42,077.28 771.03 1,081.35 40.75 50,542.20 1.48

Turnover USD ('000) 21,627.34 6.36 693.00 1.77 1.09 2,776.11 0.17 5.23 49.94 13.00 327.63 6.00 8.42 0.32 393.54 0.01

Intraday Intraday High (LKR) Low (LKR) 270.00 1,019.00 444.50 1,913.00 41.70 116.50 708.90 8.80 164.50 135.00 193.00 60.00 174.50 139.90 211.00 73.40 264.50 1,002.00 435.00 1,900.10 40.50 115.80 700.00 8.70 162.50 134.10 192.90 58.30 165.10 138.50 208.00 70.00

Close 269.50 1,007.00 440.70 1,911.10 41.10 115.80 700.40 8.70 162.70 134.10 192.90 60.00 166.10 138.60 208.10 72.00

Price Gainers
Company
S M B LEASING [X] UDAPUSSELLAWA LAKE HOUSE PRIN. KURUWITA TEXTILE COLD STORES

Price Losers
Today 0.50 32.30 109.00 23.20 174.80 Change + 0.10 + 4.80 + 11.00 + 2.20 + 14.80 % Change Company 25.00% 17.45% 11.22% 10.48% 9.25%
CEYLON PRINTERS EQUITY TWO PLC S M B LEASING NUWARA ELIYA MACKWOODS ENERGY

Today 1,293.50 25.50 0.80 1,301.00 9.70

Change - 305.50 - 3.50 - 0.10 - 99.00 - 0.70

% Change -19.11% -12.07% -11.11% -7.07% -6.73%

Top 05 Performers for the Day

Company
JKH COMMERCIAL BANK CARSONS SAMPATH DISTILLERIES

Today 269.50 115.80 440.70 208.10 192.90

Pre Day 265.00 116.20 444.00 210.60 193.00

% Change 1.70% -0.34% -0.74% -1.19% -0.05%

Volume (mn) 10.48 3.08 0.20 0.24 0.22

Contribution to Total T/O 116.4% 14.9% 3.7% 2.1% 1.8%

Turnover (LKR) 2,777,608,337 356,536,497 89,002,204 50,542,203 42,077,281

Most Active
Company
JKH COMMERCIAL BANK EXPOLANKA SOFTLOGIC FREE LANKA

Today 269.50 115.80 7.00 9.90 2.60

Pre Day 265.00 116.20 7.10 9.90 2.60

% Change 1.70% -0.34% -1.41% 0.00% 0.00%

Volume (mn) 10.48 3.08 0.52 0.38 0.33

Contribution to Total T/O 116.4% 14.9% 0.2% 0.2% 0.0%

Turnover (LKR) 2,777,608,337 356,536,497 3,647,574 3,759,710 875,103

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 20.06.2013 119.13 20.95 170.52 2.19 1.33 40.17 3.97 34.25 101.31 138.48 4.16 198.56 128.43

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 15,112.2 1,628.9 2,617.0 6,205.2 13,014.6 20,382.9

Change -206.0 -22.9 -67.0 -143.7 -230.6 -604.0

Change % -1.35% q -1.39% q -2.49% q -2.26% q -1.74% q -2.88% q

Time* 0-Jan 0-Jan 06:32 06:32 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 104.02 96.14 85.35 702.50 1,291.20 19.79 308.05

Change -2.10 -2.10 -1.25 -11.75 -82.80 -1.84 -7.10

Change % -1.98% q -2.14% q -1.44% q -1.65% q -6.03% q -8.50% q -2.25% q

Time* 06:18 06:12 06:17 06:35 06:17 06:18 06:16

Source: www.bloomberg.com

Softlogic Equity Research

Page | 4.

CSE Announcements
Bogala Graphite [BOGA:LKR26.0]: The Company has obtained a license from Geological Survey and Mines Bureau Sri Lanka for exploration of new graphite deposits at Kohombagahawatte, Rangala and Galigamuwa in Kegalle district covering 33 square kilometers and Mathugama of Kalutara District covering 56 square kilometers.

Local News
JKH to sign USD640 mn hotel deal next week: Sri Lankas top conglomerate, John Keells Holdings [JKH: LKR269.5], will sign a USD640 mn deal to establish an integrated hotel complex in the capital of Colombo, three sources told Reuters yesterday. JKH, the heavyweight of the USD18.5 bn Colombo Stock Exchange with a USD1.77 bn market cap, will sign the deal with a company from outside the country, the sources who have the direct knowledge on the deal told Reuters. Investment Promotion Minister Lakshman Yapa Abeywardena, without naming the company, said the government will sign a USD640 mn agreement next week with a local company for a 500-room hotel complex with apartments, supermarkets and restaurants. John Keells Holdings Deputy Chairman Ajith Gunawardena told Reuters that the project is in progress but declined to comment on the size of the project and if the company would sign the deal next week. [Source: www.dailymirror.lk] Sampath Bank raises USD100 m through international loan syndication: Sampath Bank [SAMP: LKR208.1] recently celebrated the success of its largest international loan transaction of USD100 m that was concluded in the first quarter of 2013. The banks consistent performance over the years coupled with its potential for sustainable growth have been the key driving forces in the success of this transaction and we are pleased to witness the high level of confidence placed by the off shore investors on the banks strategic direction, Managing Director Aravinda Perera said. The bank has established a great track record in the loan syndications space with this latest transaction drawing a great deal of interest from a diverse range of investors from a large number of Middle Eastern and Asian banks. Consequently, this deal which was launched for USD50 mn was upsized over two fold as the bank consciously decided to cap the final size to USD100 mn to suit its cash flow requirements. The transaction was facilitated by HSBC who acted as the lead arranger and book runner. [Source: www.ft.lk] Casino recants?: Gambling with fate, a top Minister on Wednesday rejected claims that the Government plans to open a casino in Colombo with Australian gaming mogul James Packer, but did not rule out the possibility in the future. Investment Promotions Minister Lakshman Yapa Abeywardana insisted that the investment proposal under discussion from casino kingpin James Packer was only for a mixed development project of USD350 mn that would include a five star hotel, restaurants and penthouses but not a casino. However, he admitted that there was room for the investors to transfer an existing gaming license from another owner and operate a casino. Abeywardana defended the loophole by vehemently pointing out that the Government would not issue new gaming licenses and that if Sri Lanka wished to reach the target of 2.5 mn arrivals by 2016 it would need to open itself up to similar investment options. In 2012 the Government set a target of USD2 bn but only managed to attract USD1.2 bn. Nonetheless Abeywardana is upbeat of the islands chances of meeting the mark in 2013. [Source: www.ft.lk] 10 investment proposals from China: Ten proposals from Chinese companies have been handed over to the Investment Promotion Ministry, an official said yesterday. Investment Promotions Minister Lakshman Yapa Abeywardana responding to questions noted that the proposals were to set up factories in areas such as Suriyaweva and Sampur. The proposals include a steel factory, IT Park and assembling motor vehicles. One proposal was to produce herbal beauty products but most of them are for smaller ventures of around USD2550 mn, he added. The Sampur investment zone received Cabinet approval over the weekend. Abeywardana Softlogic Equity Research Page | 5
5

rejected concerns that disputes over the 13th Amendment would hamper Indo-Lanka investment opportunities stressing that political issues would not infringe on business decisions. [Source: www.ft.lk] Krrish told to pay up or lose concessions: Taking an unusually tough stance the Investment Promotion Minister has told Krrish to pay up before 15 July or risk losing tax concessions that could be granted under the Strategic Development Act in Parliament. Investment Promotions Minister Lakshman Yapa Abeywardana stated that while 84% of the USD460 mn project has been paid he had told the investors to complete the transaction by 15 July or risk tax concessions that can be bestowed upon it. The practice is for any project investing above USD250 mn to receive tax and other concessions by being put under the Strategic Investment Act, which would then be approved by Parliament. We have charged them 12% interest on the previously delayed payments. If they fail to meet the 15 July deadline then we will charge them a further 12% interest and refuse it concessions eligible under the Strategic Investment Act. However, the project can still continue, he said. [Source: www.ft.lk]

Global News
China Manufacturing Contraction Deepens Amid Cash Pinch: Chinas manufacturing is shrinking at a faster pace this month, adding to stresses in the economy and financial system after interbank borrowing costs surged to the highest in seven years. The preliminary reading of 48.3 for a Purchasing Managers Index (EC11FLAS) released today by HSBC Holdings Plc and Markit Economics compares with the 49.1 median estimate in a Bloomberg News survey of 15 economists. Mays final reading of 49.2 was the first below 50 since October, indicating contraction. If market rates remain at such high levels, the only scenario for the Chinese economy is a hard landing, said Xu Gao, chief economist with Everbright Securities Co. in Beijing. That possibility is growing now. It seems the leadership is deliberately taking a wait-and-see stance to see how low China growth can be. [Source: www.bloomberg.com] Euro ministers to decide direct bank recapitalization rules on Thursday: Euro zone finance ministers will decide on Thursday when and how their bailout fund can invest in a bank to save it from failure, laying a cornerstone of the banking union seen as vital to restore economic growth. Ministers from the 17 countries using the euro will also set guidelines for how much a government would have to contribute to such a bank rescue, which banks would be eligible, and who would lose money in the process. "We will reach a decision on all aspects of direct recapitalization," a senior European Union official involved in preparations for the meeting said. Euro zone leaders want the European Stability Mechanism (ESM) bailout fund to be able to become a shareholder in a systemically important bank so that the expense of saving the institution does not fall just on the shoulders of a government that may already be struggling with huge debts. The possibility of such direct recapitalization should help boost confidence among euro zone banks, encouraging them to lend to the real economy and so boost growth. [Source: www.reuters.com]

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 7277051, +94 77 7736059 Thanuja De Silva thanuja.desilva@equity.softlogic.lk +94 11 7277059, +94 77 3120018

Branches
Horana Madushanka Rathnayaka st No. 212, 1 Floor, Panadura 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