Thursday, May 09, 2013

Today 6,238.71 3,526.51 Point Change + 28.61 + 5.21 % Change 0.46 % p 0.15 % 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

10.6% 14.3% 2,137.5 854.2 74.0 40.0 2,391.2 194.1 650.0 455.9 9.2

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]

BFI sector leads the bourse as ASPI extends gains to an 18 month high

CSE Diary for 09.05.2013

Indices continued on an upward trajectory: The bourse extended gains with heavy focus on the banking and finance sector whilst touching a peak of 6,258.26 points (+40 points) during latter trading hours. Profit taking in selected counters led the benchmark index to close with a lesser gain of 28 points with Hemas Holdings (+10.9%), Cargills (+3.1%), Sampath Bank (+2.5%) and Colombo Dockyard (+5.5%) weighing positively on the index. The S&P SL20 index secured a lesser gain of 5 points ending at 3,526.51 points. S&P SL20 caliber counters booked the top turnover slot: 8 crossings in S&P SL20 caliber counters added 44% to the days turnover. Continued interest in Commercial Bank led the counter to record 3 blocks accumulating to 3.3 mn shares at a 52-week high (offmarket) price of LKR118.0 while Distilleries and Hatton National Bank recorded two crossings each at LKR185.0 and LKR172.0. National Development Bank was noted in the gainers list touching LKR181.0 (+1.6%)

at its intra-day high with strong on-board participation. Sampath Bank and Nations Trust Bank traded at their 52-week high price levels as they ended the day with gains of 2.5% and 2.3% respectively. BFI sector activity strengthened adding 54% to turnover: Investor hunt in banks led the bourse as key focus surrounded National Development Bank, Sampath Bank and Nations Trust Bank with each depicting active on board participation amidst significant gains. Royal Ceramics continued to grab the investor focus as it saw its price move to a new 52-week high at LKR111.9 today. Related counter Lanka Walltile closed the day gaining 6.4%. Access Engineering and Distilleries also saw notable interest. Retailers continue their active streak: Heavy retail activity was observed in Touchwood Investments , SMB Leasing, Capital Alliance Finance, Environmental Resources Investments and East West Properties.

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) Inflation (%) Apr-13 as at 09.05.2013 YoY Change Annual Avg Week ending 10.05.2013 9.18 11.29 13.55 -4.54 6.4 8.8 10.20

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 6,238.7 3,526.5 2,137.5 16.9 74.0 258 2,391.2 650.0 455.9 194.1 16.9 2.3 2.1 Today 14,231.8 17,378.4 3,041.7 2,067.0 716.8 3,591.6 601.3 3,025.7 814.3 171.4

Pre Day 6,210.1 3,521.3 1,465.3 11.6 50.9 253 2,380.3 308.4 400.5 -92.1 16.8 2.3 2.2 Pre Day 14,068.9 17,337.6 2,944.1 2,065.7 702.2 3,580.8 596.4 3,006.3 802.7 174.9

Change % 0.46% p 0.15% p 45.88% 45.88% 45.48% 1.98% 0.46% 110.80% 13.84% -310.69% 0.46% 0.46% -4.55% % Change 1.16% 0.24% 3.31% 0.06% 2.08% 0.30% 0.83% 0.64% 1.45% -2.02% p p p p p p p p p q

Last Week 5,972.4 3,381.4 634.6 5.0 44.2 234 2,288.1 122.6 23.7 99.0 16.1 2.2 2.2 Last Week 13,560.0 16,731.5 2,768.1 1,948.2 686.1 3,482.8 561.8 2,795.9 805.2 171.3

% WoW Change 4.46% 4.29% 236.84% 236.84% 67.36% 10.26% 4.51% 430.06% 1827.09% 96.13% 4.51% 4.51% -4.55% % WoW Change 4.95% 3.87% 9.88% 6.10% 4.47% 3.12% 7.03% 8.22% 1.13% 0.06% 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 9.6% 6.5% 3.7% 4.2% 3.2% 3.9% 3.1% 3.2% 2.3% 2.3% 2.3% 1.2% 1.5% 1.7% 1.6% 1.3%

Volume 85,613 3,195 1,277 209 3,517 3,528,629 327 133,720 1,207,795 20,406 1,704,661 37,000 12,900 26,852 392,510 48,000

Turnover LKR ('000) 23,024.55 2,631.38 572.36 388.38 151.00 416,505.39 234.70 1,263.25 207,742.67 2,783.67 315,362.09 2,150.69 2,125.33 4,080.09 89,925.35 3,433.22

Turnover USD ('000) 182.43 20.85 4.53 3.08 1.20 3,300.03 1.86 10.01 1,645.98 22.06 2,498.66 17.04 16.84 32.33 712.49 27.20

Intraday Intraday High (LKR) Low (LKR) 270.10 828.00 449.00 1,870.00 43.00 118.80 722.00 9.60 172.50 137.00 187.00 59.20 165.00 153.00 233.00 72.00 267.00 820.00 445.00 1,850.00 42.20 118.10 715.00 9.30 170.50 135.00 181.00 56.50 160.10 150.00 225.00 70.20

Close 267.50 826.00 446.00 1,852.20 42.50 118.50 717.60 9.40 171.70 136.10 181.20 58.80 165.00 152.00 231.10 72.00

Price Gainers
Company
CAL FINANCE ENTRUST SEC ASIRI CENTRAL CHILAW FINANCE HARISCHANDRA

Price Losers
Today 26.80 24.20 294.00 13.70 2,370.00 Change + 5.00 + 3.20 + 38.00 + 1.50 + 259.40 % Change Company 22.94% 15.24% 14.84% 12.30% 12.29%
SOFTLOGIC CAP MERC. SHIPPING MORISONS EQUITY TWO PLC ENVI. RESOURCES [W 0003]

Today 6.40 166.20 182.00 27.50 1.80

Change - 0.50 - 12.80 - 13.00 - 1.90 - 0.10

% Change -7.25% -7.15% -6.67% -6.46% -5.26%

Top 05 Performers for the Day

Company
COMMERCIAL BANK DISTILLERIES HNB NAT. DEV. BANK SAMPATH

Today 118.50 181.20 171.70 180.00 231.10

Pre Day 118.70 180.60 171.00 178.10 225.50

% Change -0.17% 0.33% 0.41% 1.07% 2.48%

Volume (mn) 3.53 1.70 1.21 1.10 0.39

Contribution to Total T/O 17.4% 13.2% 8.7% 8.3% 3.8%

Turnover (LKR) 416,505,389 315,362,095 207,742,671 197,970,075 89,925,349

Most Active
Company
TOUCHWOOD S M B LEASING COMMERCIAL BANK SOFTLOGIC FREE LANKA

Today 6.30 1.00 118.50 11.60 2.90

Pre Day 6.00 0.90 118.70 11.20 2.80

% Change 5.00% 11.11% -0.17% 3.57% 3.57%

Volume (mn) 10.84 4.53 3.53 2.53 2.42

Contribution to Total T/O 2.7% 0.2% 17.4% 1.2% 0.3%

Turnover (LKR) 63,468,849 4,528,992 416,505,389 29,439,031 6,999,396

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 09.05.2013 129.20 20.57 166.08 2.34 1.28 42.55 4.05 33.65 102.80 134.97 4.29 196.13 126.21

Announcements
Dividends
Company Agalawatte Plantations PLC 0 0 0 0 0 0 0
Company Description

DPS (LKR) 2.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Proportion 0

XD Date 28-05-2013 0 0 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00 00-Jan-00

XR Date

Payment Date 05-06-2013 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 15,105.1 1,632.7 2,771.0 6,585.4 14,191.5 23,211.5

Change 48.9 6.7 -13.6 1.9 -94.2 -32.9

Change % 0.32% p 0.41% p -0.49% q 0.03% p -0.66% q -0.14% q

Time* 0-Jan 0-Jan 07:03 07:03 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 103.87 96.26 87.30 705.50 1,470.00 24.05 334.35

Change -0.47 -0.36 -0.38 -0.50 -3.70 0.12 -2.70

Change % -0.45% q -0.37% q -0.43% q -0.07% q -0.25% q 0.51% p -0.80% q

Time* 06:51 06:56 06:52 07:12 06:52 06:51 06:51

Source: www.bloomberg.com

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CSE Announcements
Employee Share Option Schemes:
Company John Keells Holdings [JKH: LKR267.5] Commercial Bank of Ceylon [COMB: LKR118.5] Hatton National Bank [HNB: LKR171.7] Hatton National Bank [HNB.X: LKR127.6] No. of Shares Listed Stated Capital as at 30th April 2013 (LKR) 134,016 26,499,283,486 134,016 26,499,283,486 Voting - 128,184 12,638,296,000 Non-Voting- 62,721

Dealing by Directors:
Company Pan Asia Bank [PABC: LKR22.1] Name Mr. Eshana De Silva Relationship Director Transaction Purchase Quantity 1,208,639 Price (LKR) 21.00-21.10 Date 08.05.13

Local News
Sri Lanka's forex reserves pick up in March: Sri Lanka's forex reserves picked up USD30 mn to USD6,689 mn US dollars, ending two months of declines and is estimated to have increased further in April, the Central Bank said Lanka's Treasuries yields edged lower across maturities Wednesday with the 12 month yield falling 03 basis points to 11.29%, the state debt office said. By end April 2013, forex reserves are estimated to have increased by about another 200 mn to USD6.9 bn, the Central Bank said. Measured in terms of imports, reserves were equal to 4.4 months' worth imports and 4.5 months in April. But if foreign reserves are actually used to meet import expenses and defend a currency peg, a country gets into a balance of payments crisis, as it is also the practice of a Central Bank to print fresh money to keep interest rates down, a practice known as sterilizing interventions. Sri Lanka's central bank is now in a phase of sterilizing foreign purchases, by selling down its Treasury bill stock which results in a build-up of foreign reserves. Forex reserves of a central bank represent the net 'unspent deposits' in the banking system, analysts say. [Source: www.lbo.lk] Exports drop 8.1% in 1Q: Sounding alarm bells, exports decreased by 8.1% in the first quarter of 2013 from USD2.57 mn to USD2.36 mn, with March contributing a 2.8% drop year-on-year. The latest external performance data by the Central Bank showed yesterday that earnings from exports declined by 2.8%YoY in March 2013, as earnings from industrial exports, which account for about three-fourths of total export earnings, declined. Even though earnings from textiles and garments, which account for more than a half of industrial exports in value terms, recorded a further increase of 5% year-on-year in March 2013, overall industrial numbers for the 1Q showed a drop of 8.7%. Exports of garments to the USA increased in March too, on a year-on-year basis, following the increase recorded in February, while exports of garments to the European Union declined in March, as in February. Agriculture products also showed a 4.2% decrease in the 1Q sliding from USD575 mn in 2012 to USD551 mn in 2013. The largest drop was recorded by mineral products that reduced 72% in the 1Q. [Source: www.ft.lk] Lankan labour force and employment plunge in 2012: The economically-active population aged 10 years and above- popularly known as a countrys labour force - declined in Sri Lanka by 1.1% to 8.465 mn due to migration of economically active persons during 2012, the Central Bank annual report showed. According to an ex-Central Banker and economist Dr. D.R. Wijewardena, sending more for foreign jobs could also create a labour shortage in the country at a time when the unemployment rate is at historical low of 4.0% which is considered as near full employment. The issue of labour shortage has been repeatedly pointed out by veterans in sectors such as Business Process Outsourcing (BPO), construction, banking and hospitality in the recent past. Mirror Business yesterday pointed out the severe dearth of skilled IT graduates where the country produces only 3,000 IT engineers annually whereas the annual requirement is above 5,000, a situation which could be further intensified by the impending immigration laws in United States which double the skilled immigrants quota. According to the quarterly labour force survey conducted by the Softlogic Equity Research Page | 5
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Department of Census and Statistics, covering the entire island also disclosed that the number of employed persons too followed suit, declining by a slight 0.8% to 8.129 mn. [Source: www.dailymirror.lk] Sri Lanka mulls importing Azeri crude: Sri Lanka is discussing the import of Azeri crude for its 50,000 barrels per day refinery where light distillate yields have plunged after Iranian oil imports were stopped by US sanctions. Mahinda Rajapaksa has discussed the possibility of importing crude oil from Azerbaijan, a statement from the Presidents office said yesterday. Sri Lanka's petroleum industries minister Anura Yapa had discussion with visiting foreign minister of Azerbaijan Elmar Mammadya on Wednesday. The petroleum industries ministry said a team from a Singapore based Azeri oil firm will come to Colombo soon for a technical evaluation with officials of state-run Ceylon Petroleum Corporation. CPC's refinery lacks advanced cracking technology and was dependent on Iranian light crude to get sufficient light distillates to make refining viable. [Source: www.lbo.lk]

Global News
U.K. Industrial Output Rises More Than Forecast on Energy: UK industrial production rose more than economists forecast in March as cold weather boosted demand for electricity and gas. Output increased 0.7% from February, when it gained 0.9%, the Office for National Statistics said today in London. The median forecast of 31 economists in a Bloomberg News survey was for a gain of 0.2%. Electricity and gas surged 2.4 percent, the most since October. The data also showed that production increased 0.2% in the first quarter, matching an estimate in last months gross domestic product report. Britains economy grew 0.3% in the three months through March and surveys suggest that the recovery may have continued into this quarter. Bank of England policy makers meeting today will probably maintain their target for asset purchases at 375 bn pounds (USD583 bn) as they weigh risks to the rebound from the contraction in the fourth quarter. [Source: www.bloomberg.com] ECB Seen Desisting From Further Rate Cut Until 2015: The European Central Bank will refrain from cutting its interest rate again until at least 2015, according to economists surveyed since President Mario Draghis pledge last week to deliver another reduction if needed. The Frankfurt-based central bank will leave its main refinancing rate at a record-low 0.5% until the end of 2014, according to the median of 18 forecasts in the monthly Bloomberg survey of economists. The same survey shows that 27 of 32 economists predict no cut in the benchmark by the end of 2013, while five see a reduction to 0.25%. Draghi said on May 2 that the ECB remains ready to act again after it lowered its key rate by a quarter-point the same day. While economists in todays survey reduced forecasts for euro-region gross domestic product this year, data suggest the 17nation zone may return to growth after industrial production and factory orders in Germany both jumped more than forecast. I dont expect another ECB rate cut, said Marco Valli, chief euro-area economist at UniCredit Global Research in Milan. Inflation will move closer to 2% again and we will see moderate economic growth in the second half of this year. [Source: www.bloomberg.com]

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