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Daily
05th December 2012
Market Performance
ASPI MPI 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) 05.12.2012 5,323 4,857 871.0 727.8 25.9 225 14.1 2,044 15.7 2.4 1.9 04.12.2012 5,331 4,856 505.5 369.0 212.6 225 14.1 2,047 15.6 2.4 1.9 %Chg. -0.2 0.0 72.3 97.3 -87.8 0.0 0.0 -0.2 0.6 0.0 0.0

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Market Indices
5,600 5,400 5,200 5,000 4,800 4,600 29/11/2012 30/11/2012 03/12/2012 04/12/2012 05/12/2012 ASI MPI

Market Outlook
The bourse continued to trade on a relatively quiet note with the ASPI closing virtually flat at 5323 as investors opted to remain on the sidelines. Turnover however increased to LKR871 mn, with trading in Aviva NDB Insurance and John Keells Holdings accounting for 79% of the days total. Gainers matched losers again with Mackwoods Energy, Hapugastenne Plantations and Nanda Investments rising by 17.1%, 12.0% and 11.1% offsetting losses in Kalamazoo, Chevron Lubricants and Cargo Boat which declined by 7.8%, 7.0% and 6.7% respectively. Meanwhile, Asian markets rose on hopes for progress in talks in Washington aimed at avoiding the fiscal cliff, while Chinese shares surged as they bounced back from four-year lows. In economic news, according to Central Bank (CBSL) projections, Sri Lanka is expecting a balance of payments (BOP) surplus of USD380 mn in 2012 (down from the earlier projected USD1.25 bn in May) while forecasting a BOP surplus of USD780 mn for 2013. The CBSL meanwhile is forecasting the deficit in the current account to narrow down to 5.1% of GDP in 2012 (from 7.6% in 2011) while projecting it to decline to 3.6% of GDP in 2013. Market Trajectory With regard to the market trajectory, the bourse is likely to continue to trade in a narrow band in the absence of any significant news that would provide the impetus for a break to the upside. While interest rates continue to trend upwards, we do not believe that this is likely to shift significant funds away from the equities market given the relative dichotomy between interest rate and equities in the domestic market. With the majority of global markets reporting positive YTD gains, we believe that Sri Lanka may also join the bandwagon once its robust domestic economics become visible to a larger global investor audience.

Oil Price Movement

Source- www.money.cnn.com

Gainers /Losers (%)

City Housing Cargo Boat Chevron Lubricants

-5.8 -6.7 -7.0

Kalamazoo -7.8 Radiant Gems Nanda Investments Hapugastenne Plantations Mackwoods Energy

9.9 11.1 12.0 17.1

Significant Trades (Turnover in LKR Mn)

600 500 400 300 200 100 0 CTCE JKH AMSL NDB

Global Markets
Sri Lanka - ASPI India - Sensex Pakistan - KSE 100 Taiwan Weighted Singapore - Straits Times Hong Kong - Hang Seng Index 5,323 19,388 16,680 7,649 3,076 22,271 %Chg. -0.15 0.21 0.18 0.63 0.45 2.16

Interest Rates & Currencies

Prime Lending Rate (Avg. Weighted) Deposit Rate (Avg. Weighted) Treasury Bill Rate (360 Days) Dollar Denominated Bond Rate LKR/US$ (Selling Rate) LKR/EURO (Selling Rate) 05.12.2012 14.2% 9.8% 12.9% 5.9% 130.0 171.0

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. DNH Financial is a fully owned subsidiary of Environmental Resources Investment PLC (ERI).