Wednesday, February 19, 2014

Today 5,986.24 3,281.77 Point Change - 35.42 - 6.27 % Change -0.59 % q -0.19 % 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

1.2% 0.5% 714.6 830.1 49.2 41.2 2,499.8 197.8 302.4 104.5 -3.3

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]

Big caps drag index below 6,000; Buying interest remain weak

CSE Diary for 19.02.2014

Index drops below 6,000: The benchmark index continued to weaken amidst the lack of buying interest. The ASPI fell below the 6,000 mark by 11a.m and stagnated around the same level with marginal movement in either direction. Finally the index closed with a dip of 35 points as the big caps John Keells Holdings, Ceylon Tobacco and Sri Lanka Telecom weighed negatively on the index.
No Crossings: No crossings were recorded during the day.

a similar pattern to the Voting share as the counter dipped 1.2% for the day to close at LKR60.0. Banking sector counters Sampath Bank, Nations Trust Bank, Seylan Bank [Non-Voting] and Commercial Bank all entered the top turnover list with no major large blocks changing hands. Silent retail investors: Retailers continued to remain silent amidst the falling market. As a result no major retail interest was visible. Some low level interest was visible in Textured Jersey and Expolanka Holdings.

JKH and Banks maintain top turnover slots: John Keells Holdings topped the turnover slot amidst heavy selling pressure as 1.2mn shares in volume traded. A single mid-sized block of 153k shares changed hands on-board at LKR216.0. The counter slipped 1.6% to LKR215.0. JKH Warrants 0023 also registered investor interest and followed

Statistical Look Up
Treasury Bill (%) 3 months 6 months 12 months AWPLR Excess Liquidity (LKR 'bn) as at 18.02.2014 Inflation (%) Jan-14 YoY Change Annual Avg Week ending 21.02.2014 6.75 7.08 9.38 -13.06 4.4 6.5 6.90

6300 6200

Index

6100 6000
5900 5800

ASPI
3500 3450 3400 3350 3300 3250 3200 3150

Turnover LKR ('mn)

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

200.0

Volume ('mn)

150.0 100.0 50.0

Index

0.0

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 5,986.2 3,281.8 714.6 5.5 49.2 231 2,499.8 302.4 104.5 197.8 15.9 2.0 2.9 Today 13,407.0 20,742.3 2,755.1 1,721.6 768.2 3,149.3 568.7 2,888.9 720.4 167.0

Pre Day 6,021.7 3,288.0 604.1 4.6 46.8 228 2,513.8 44.8 274.4 -229.5 16.0 2.0 2.9 Pre Day 13,448.9 20,760.4 2,753.5 1,742.2 770.8 3,162.0 572.9 2,921.7 726.1 170.2

Change % -0.59% q -0.19% q 18.29% 18.29% 5.08% 1.32% -0.56% 574.17% -61.90% -186.18% -0.56% -0.55% 0.00% % Change -0.31% -0.09% 0.06% -1.18% -0.34% -0.40% -0.73% -1.12% -0.79% -1.84% q q p q q q q q q q

Last Week 6,084.5 3,337.0 548.6 4.2 68.6 218 2,540.0 172.2 182.8 -10.6 16.1 2.0 2.8 Last Week 13,493.0 21,168.9 2,804.8 1,781.2 774.3 3,178.8 580.8 2,946.0 729.2 166.2

% WoW Change -1.61% -1.65% 30.26% 30.26% -28.25% 5.96% -1.58% 75.57% -42.81% -1971.44% -1.58% -1.58% 3.57% % WoW Change -0.64% -2.02% -1.77% -3.35% -0.79% -0.93% -2.09% -1.94% -1.21% 0.49%

Softlogic Equity Research

Page | 2.

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 8.5% 9.0% 2.7% 4.6% 3.0% 3.8% 2.4% 3.0% 2.0% 1.6% 2.5% 1.4% 1.2% 1.5% 1.1% 1.1%

Volume 1,261,521 748 20,586 53 20,973 140,434 343 10,801 1,555 34,695 3,090 37,473 2,502 9,652 363,078 16

Turnover LKR ('000) 271,565.66 885.73 7,205.10 112.38 901.00 16,511.06 202.40 98.79 238.97 3,469.57 634.43 2,808.56 347.78 1,406.96 61,669.49 0.98

Turnover USD ('000) 2,075.93 6.77 55.08 0.86 6.89 126.22 1.55 0.76 1.83 26.52 4.85 21.47 2.66 10.76 471.42 0.01

Intraday High (LKR) 218.80 1,210.00 350.00 2,140.00 43.50 118.20 600.00 9.30 155.00 101.50 208.00 75.00 139.00 146.00 171.00 61.30

Intraday Low (LKR) 215.00 1,175.00 350.00 2,100.00 41.40 117.20 588.00 9.10 153.50 100.00 200.50 74.00 138.10 145.50 167.00 61.30

Close 215.00 1,198.80 350.00 2,119.60 41.70 118.00 590.50 9.10 153.50 100.00 207.40 74.30 139.00 145.50 170.00 61.30

Price Gainers
Company
ASCOT HOLDINGS BIMPUTH FINANCE BLUE DIAMONDS [X] CITRUS LEISURE [W0019] MACKWOODS ENERGY

Price Losers
Today 137.10 56.00 1.10 1.10 7.00 Change + 22.00 + 6.10 + 0.10 + 0.10 + 0.60 % Change Company 19.11% 12.22% 10.00% 10.00% 9.37%
PC HOUSE LANKA CENTURY [W0006] MERC. SHIPPING CEYLON LEATHER [W0014] MET. RES. HOL.

Today 0.30 0.70 110.20 1.20 17.50

Change - 0.20 - 0.20 - 18.80 - 0.20 - 2.30

% Change -40.00% -22.22% -14.57% -14.29% -11.62%

Top 05 Performers for the Day

Company
JKH LANKA CENTURY SAMPATH NATIONS TRUST JKH[WARRANTS]

Today 215.00 14.60 170.00 66.00 60.00

Pre Day 218.40 13.90 165.00 65.80 60.70

% Change -1.56% 5.04% 3.03% 0.30% -1.15%

Volume (mn) 1.26 4.89 0.36 0.87 0.51

Contribution to Total T/O 10.9% 2.9% 2.5% 2.3% 1.2%

Turnover (LKR) 271,565,660 71,566,189 61,669,489 57,163,676 30,714,413

Most Active
Company
PC HOUSE LANKA CENTURY PCH HOLDINGS SWARNAMAHAL FIN SIERRA CABL

Today 0.30 14.60 1.10 2.20 1.70

Pre Day 0.50 13.90 1.10 2.20 1.80

% Change -40.00% 5.04% 0.00% 0.00% -5.56%

Volume (mn) 19.38 4.89 1.46 1.39 1.35

Contribution to Total T/O 0.3% 2.9% 0.1% 0.1% 0.1%

Turnover (LKR) 6,806,524 71,566,189 1,462,916 3,060,462 2,306,537

Softlogic Equity Research

Page | 3.

Currency Board
Local - Indicative Rate against LKR
Currency Australia China EU India Japan UK USA Dollar Yuan Euro Rupee Yen Pound Dollar Indicative Rate 18.02.2014 118.56 21.57 179.26 2.12 1.28 218.71 130.82

CSE Announcements
Dividends
Company Talawakelle Tea Estates PLC Sampath Bank PLC 0 0 0
Company Description

DPS (LKR) 3.00 8.00 0.00 0.00 0.00

Proportion 0 0

XD Date 01-04-2014 01-04-2014 0 00-Jan-00 00-Jan-00

XR Date

Payment Date 09-04-2014 08-04-2014 1/0/1900 00-Jan-00 00-Jan-00

Renunciation

Rights Issues / Scrip Dividend / Sub division / Capitalization

0 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

New Listing
Company
0

Type of Security
-

Code
1/0/1900

Board
1/0/1900

Offer Price
0.00

1/0/1900

1/0/1900

0.00%

Key Corporate Diclosures

Nuwara Eliya Hotels resolved to amalgamate with Grand Hotel (Private) Limited, its wholly owned subsidiary.

Material Dealings by Related Parties of Listed Companies

Company NO MATERIAL DEALINGS. Name 0 0 Relationship 0 0 Transaction 0 0 Quantity 0 0 Price (LKR) 0.00 0.00 Date 0 0

Global Markets
Index AMERICA Dow Jones Industrial Average EUROPE EURO STOXX 50 Price EUR FTSE 100 Index ASIA Nikkei 225
* Time is as at ET

Value 16,130.4 3,107.1 6,783.9 14,766.5

Change -24.0 -10.3 -12.6 -76.7

Change % -0.15% q -0.33% q -0.18% q -0.52% q

Time* 16:15 05:31 05:31 01:28

Source: www.bloomberg.com

Commodity Markets
Commodity ENERGY Crude Oil (WTI) AGRICULTURE ICE Cotton #2 CBOT Wheat METALS COMEX Gold COMEX Copper
* Time is as at ET

Units USD/bbl. USd/lb. USd/bu. USD/t oz. USd/lb.

Price 102.64 89.54 607.25 1,320.00 328.90

Change 0.21 0.06 -0.25 -4.40 0.35

Change % 0.21% p 0.07% p -0.04% q -0.33% q 0.11% p

Time* 05:14 05:12 05:14 05:15 05:14

Source: www.bloomberg.com

Softlogic Equity Research

Page | 4.

TOP STORIES
Local
Sri Lanka Treasuries yields ease Sri Lanka's Treasuries yields edged lower across maturities at Wednesday's auction with the 12 month yield down 02 basis points to 6.75 percent, the state debt office said. The 6-month yield was also down 02 basis points to 6.90 percent and the 12-month yield was down 02 basis points to 7.08 percent.The debt office said it accepted 3.0 billion rupees in 3-month bills, 5.3 billion rupees in 6-month bills and 10.4 billion rupees in 12-month bills. . [Source: www.lbo.lk] Sri Lanka cabinet approves integrated resort investments Sri Lanka's cabinet of ministers had approved investment concessions for three integrated resort projects which appear to limit income tax cuts to gaming, according to public notices published. Government gazette notices for Lake Leisure Holdings (Private) Limited (connected to Australia's James Packer), Waterfront Properties (Private) Limited. (connected to John Keells Holdings) and The Queensbury Leisure Limited connected to entrepreneur Dhammika Perera said corporate income tax holidays and import duty concessions on materials have been approved. [Source: www.lbo.lk] No surprises on rate hold: SCB Standard Chartered predicted yesterday the Central Bank will adopt a wait-and-see approach after holding rates steady, but warned the situation could change if credit growth fails to hit double digits or inflation spikes. Releasing its Economic Alert hot on the heels of the Central Bank policy report on Monday, the bank saw no surprises but warned that a further rate cut could narrow the policy rate corridor. We expect the Central Bank to remain in wait-and-see mode, and believe that only significant weakness in economic data will trigger a further rate cut. [Source: www.ft.lk] Tea runs dry Frowned upon by the weather gods, Sri Lankas tea production has plunged by 50% causing havoc to the livelihoods of about 400,000 small holders and prompting possible relief from the Government, which has described the situation as disturbing. Tea smallholders numbering close to 400,000 have been affected by this condition, which has resulted in low income for factories that have begun processing every other day due to leaf shortage and daily intake becoming uneconomical. [Source: www.ft.lk]

Global
China Cuts Treasury Holdings Most Since 2011 Amid Taper China, the largest foreign U.S. creditor, reduced holdings of U.S. Treasury debt in December by the most in two years as the Federal Reserve announced plans to slow asset purchases. The nation pared its position in U.S. government bonds by $47.8 billion, or 3.6 percent, to $1.27 trillion, the largest decline since December 2011, according to U.S. Treasury Department data released yesterday. At the same time, international investors increased holdings by 1.4 percent, or by $78 billion, in December, pushing foreign holdings to a record $5.79 trillion. [Source: www.bloomberg.com] U.K. Unemployment Rate Unexpectedly Rises in Fourth Quarter Britains unemployment rate unexpectedly rose in the fourth quarter, suggesting the recent improvement in the labor market has lost some momentum. The jobless rate measured by International Labour Organization methods rose to 7.2 percent, the first increase since February last year, from 7.1 percent in the three months through November, the Office for National Statistics said in London today. No change was forecast, based on the median of 31 estimates in a Bloomberg News survey. In January, jobless claims fell 27,600, more than economists forecast. [Source: www.bloomberg.com]

Softlogic Equity Research

Page | 5.

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

Branches Softlogic Equity Sales

Dihan Dedigama dihan.dedigama@equity.softlogic.lk +94 11 7277010, +94 77 7689933 Eardley Kern Horana Madushanka Rathnayaka No. 212, 1st Floor, Panadura Road, Horana madushanka.rathnayaka@equity.softlogic.lk +94 34 7451000, +94 77 3566465 Negombo Krishan Williams No. 121, St. Joseph Street Negombo 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

l.kern@equity.softlogic.lk
+94 11 7277053, +94 77 7348018 Chandima Kariyawasam chandima.kariyawasam@equity.softlogic.lk +94 11 7277058, +94 77 7885778 Thanuja De Silva thanuja.desilva@equity.softlogic.lk +94 11 7277059, +94 77 3120018

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 | 6.