First Capital Equities (Private) Limited

Market Indices
ASI S&P SL20

20th August January 2013 2014 16th

Market Performance
3,600 3,400

Daily
17.01.2014 6,131 3,408 1,647.8 947.8 1,028.0 245 16.5 2,551 19.3 2.8 2.0 %Chg. 0.4 0.5 -59.0 -75.4 -72.7 -4.9 0.5 0.4 0.4 0.0 1.8

6,200

6,000 3,200
ASI S&P SL20

5,800
10/1/2014 13/1/2014 16/1/2014 17/1/2014

3,000
20/1/2014

MARKET WATCH

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)

20.01.2014 6,157 3,426 675.8 233.5 280.5 233 16.6 2,561 19.4 2.8 2.0

Market Outlook
The market opened on a positive note with the ASPI gaining 0.4% to close at 6157. Turnover jumped to LKR676 mn with parcels of John Keells Holdings and Chevron Lubricants Lanka collectively accounting for 40% of the days total. Gainers outpaced losers with Beruwela Walk Inn, Commercial Leasing and Finance and Huejay International Investments rising by 16.4%, 15.4% and 13.9% and offsetting losses in Lanka Century Investments (W3), Hikkaduwa Beach Resort and Namunukula Plantations which declined by 50.0%, 11.9% and 9.0% respectively. Meanwhile, European markets started the week on a sour note in the wake of losses in Germany's 12 largest bank and better than expected Chinese data failed to dispel caution. Market Trajectory

Turnover Composition & Net Foreign Flows

1,000

35%
LKR Mn

500

65%

0 YTD MTD WTD

Foreign

Domestic

-500

Gainers /Losers (%)

Tangerine Beach Hotels Namunukula Plantations Hikkaduwa Beach Resort Lanka Century Invest (W0003) Mackwoods Energy Huejay International Invest. Commercial Leasing & Finance Beruwela Walk Inn

-8.9 -9.0 -11.9 -50.0 11.3 13.9 15.4

LKR Mn

As equity market conditions improve, we reiterate that the possibility to generate superior returns in the medium to longer term exists provided the right strategy is implemented. With majority of 3Q2014/4Q2013 corporate results expected to be released in the coming weeks, we advise investors to proactively seek counters that are likely to record healthy and sustainable top line growth (as a result of their strong domestic focus), firm margins and are cash generative, attributes which we believe will lead to strong positive gains and outperformance in the market.

16.4

Significant Trades
200 150 100 50 0

JKH

LLUB

LOFC

HAYL

BRICS Performance Vs ASPI (YTD dollarised)

10.0% 5.0% 0.0% -5.0% -10.0%

Market Liquidity (Turnover)

2000 1500

LKR Mn

1000 500
2014-Jan-13
2014-Jan-10 2014-Jan-16 2014-Jan-17 2014-Jan-20

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 6157 21,205 27,001 8,622 3,129 22,929 1,839 3,152 140

%Chg. 0.42 0.67 0.32 0.30 -0.59 -0.88 -0.39 -0.08 0.02

Interest Rates & Currencies

Prime Lending Rate (Avg. Weighted) Deposit Rate (Avg. Weighted) # Treasury Bill Rate (364 Days) Dollar Denominated Bond Rate Inflation Rate (YoY) LKR/US$ (Selling Rate) LKR/EURO (Selling Rate) Gold (USD/oz) Oil (Brent) (USD/barrel)

20.01.2014 9.77% 9.37% 7.15% 6.00% 4.70% 132.17 179.65 1,254.30 106.15

This Review is prepared and issued by First Capital Equities (Pvt) Ltd. 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, First Capital Equities (Pvt) Ltd and/or its Directors, employees, are not responsible for the correctness, usefulness, reliability of same. First Capital Equities (Pvt) Ltd 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. First Capital Equities (Pvt) Ltd 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 First Capital Equities (Pvt) Ltd with respect to the Review and agree to indemnify and hold First Capital Equities (Pvt) Ltd 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. No part of this document may be reproduced, distributed or published in whole or in part by any means to any other person for any purpose without prior permission.

Disclaimer