DNH Financial (Pvt) Ltd.

www.dnhfinancial.com +94115700777

Daily
21st June 2013
Market Performance
S&P SL20

Market Indices
ASI

6,400 6,300

3,600 3,500 3,400

DNH MARKET WATCH

6,200 6,100
17/06/2013 19/06/2013
18/06/2013

3,300
ASI 20/06/2013 S&P SL20
21/06/2013

3,200

ASPI S&P SL 20 Turnover (mn) Foreign Purchases (mn) Foreign Sales (mn) Traded Companies Market PER (X) Market Cap (LKR bn) Market Cap (US$ bn) Dividend Yield (%) Price to Book (X)

21.06.2013 6,155 3,467 565.0 221.1 53.6 240 16.7 2,364 18.2 2.2 2.3

20.06.2013 6,211 3,492 3,475.9 2,826.4 3,009.4 241 16.9 2,385 18.4 2.2 2.3

%Chg. -0.9 -0.7 -83.7 -92.2 -98.2 -0.4 -1.2 -0.9 -1.0 0.0 0.0

Market Outlook
The market closed the week on a negative note with the ASPI losing 0.9% to end at 6155. Turnover recorded LKR565 mn with trading in Distilleries, Sampath Bank and National Development Bank accounting for 39% of the total. Losers outpaced winners with SMB Leasing(X), Beruwala Walk Inn and Ceylon Leather(W0014) falling by 20.0%, 16.1% and 12.5% and offsetting advances in Good Hope, Colombo Investment Trust and Industrial Asphalts which rose by 19.0%, 14.4% and 11.6% respectively. Meanwhile, global markets fell as investors reacted negatively to the possible scaling back of the Feds stimulus measures later this year.
Market Trajectory In terms of market trajectory, we believe that the current price weakness in the bourse provides an opportunity for medium to long-term investors to pick up attractively priced growth stocks. Although sentiment and liquidity may impact the market in the near term, we believe that Sri Lankas structural story is intact and compelling with a strong multiplier effect on corporate EPS growth. Consequently we advise investors to enter the market in an informed manner carefully selecting sectors and counters that will fully benefit from positive domestic economics.
12

Turnover Composition & Net Foreign Flows

17,500 15,000

39% 61%
LKR Mn

12,500 10,000 7,500 5,000 2,500

Foreign

Domestic

0 YTD MTD WTD

Gainers /Losers (%)

Sigiriya Village Ceylon Leather (W0014) Beruwala Walk Inn SMB Leasing(X) Kalamazoo Industrial Asphalts Colombo Investment Good Hope

-8.9 -12.5 -16.1 -20.0

11.0 11.6
14.4 19.0

Significant Trades
100 80
LKR Mn

While we do admit that companies that have a high import or energy content as part of their cost structure or are significantly leveraged may continue to be challenged, robust volume growth however could enable them to generate firm revenues and cashflows. In this respect, we advise investors to seek high quality growth companies with the domestic focus in order to build a robust portfolio that will perform in a complete market cycle.

60 40 20 0 DIST SAMP NDB HNB

BRICS Performance Vs ASPI (YTD dollarised)

16.0%

Market Liquidity (Turnover)

3000
LKR Mn

8.0% 0.0% -8.0%

-16.0%

2250 1500 750

17/06/2013 20/06/2013 21/06/2013
18/06/2013 19/06/2013

-24.0% -32.0%

0 Brazil Russia India China South Africa Sri Lanka

Global Markets
Sri Lanka - ASPI India - Sensex Pakistan - KSE 100 Taiwan Weighted Singapore - Straits Times Hong Kong - Hang Seng S&P 500 Euro Stoxx 50 MSCI Asia Pacific

Index 6,155 18,774 22,015 7,793 3,124

20,263

1,588 2,606 128

%Chg. -0.90 0.29 -0.55 -1.34 -0.28 -0.59 -2.50 0.76 -4.14

Interest Rates & Currencies

Prime Lending Rate (Avg. Weighted) Deposit Rate (Avg. Weighted) Treasury Bill Rate (360 Days) Dollar Denominated Bond Rate Inflation Rate (Annual Average) LKR/US$ (Selling Rate) LKR/EURO (Selling Rate) Gold (USD/oz) Oil (Brent) (USD/barrel)

21.06.2013 12.4% 10.7% 10.9% 5.9% 7.3% 130.0 172.8 1,277.8 102.8

Disclaimer
This Review is prepared and issued by DNH Financial (Pvt.) Ltd. (DNH) based on information in the public domain, internally developed and other sources, believed to be correct. Although all reasonable care has been taken to ensure the contents of the Review are accurate, DNH and/or its Directors, employees, are not responsible for the correctness, usefulness, reliability of same. DNH may act as a Broker in the investments which are the subject of this document or related investments and may have acted on or used the information contained in this document, or the research or analysis on which it is based, before its publication. DNH and/or its principal , their respective Directors, or Employees may also have a position or be otherwise interested in the investments referred to in this document. This is not an offer to sell or buy the investments referred to in this document. This Review may contain data which are inaccurate and unreliable. You hereby waive irrevocably any rights or remedies in law or equity you have or may have against DNH with respect to the Review and agree to indemnify and hold DNH and/or its principal, their respective directors and employees harmless to the fullest extent allowed by law regarding all matters related to your use of this Review.