First Capital Equities (Private) Limited

Market Indices
ASI S&P SL20

10th 2013 16th September August 2013

Market Performance
3,600 3,400 3,200

Daily
09.09.2013 5,605 3,132 323.7 143.5 36.3 229 15.9 2,309 17.1 2.8 2.1

6,000 5,800 5,600

ASI S&P SL20

MARKET WATCH

5,400
04/09/2013 05/09/2013 06/09/2013 09/09/2013 10/09/2013

3,000

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)

10.09.2013 5,667 3,151 629.7 87.0 373.8 228 16.1 2,334 17.3 2.8 2.2

%Chg. 1.1 0.6 94.5 -39.4 929.8 -0.4 1.1 1.1 1.1 0.0 1.0

Market Outlook
The market closed modestly up with the ASPI increasing 1.1% to end the trading session at 5667. Turnover recorded LKR629.7 mn with trading in John Keells Holdings and Ceylon Guardian Investment Trust accounting for 66% of the days total. Gainers marginally offset losers with Environmental Resources Investments(W003), Environmental Resources Investments(W006) and Ceylon Leather(W0013) rising by 33.3%, 25.0% and 20.0% and offsetting declines in Royal Palms Beach Hotels, Kahawatte Plantations and Lanka Ceramic which fell by 8.7%, 7.7% and 5.4% respectively. Meanwhile, World shares climbed to a near one-month high and oil and government bonds slipped, helped by receding expectations of US-led military action against Syria and after better-than-expected Chinese data.
12

Turnover Composition & Net Foreign Flows

18,000

14%

15,000 12,000

LKR Mn

9,000 6,000 3,000 0 YTD MTD WTD

86%

Foreign

Domestic

-3,000

Gainers /Losers (%)

Associated Motor Finance Lanka Ceramic Kahawatte Plantations Royal Palms Beach Hotels Citrus Leisure(W0019) Ceylon Leather(W0013) Env. Resources Invest(W006) Env. Resources Invest(W003)

Market Trajectory Given the fact that most investors would now agree that the potential for short term trading opportunities are markedly limited, selecting medium to longer term investments would depend on a number of parameters, most importantly the strength of the top line and its sustainability. While we do not rule out the importance of earnings as a strong indicator of growth, it is highly important to determine the source of profits, whether a result of top line growth or an increase in other income or a dramatic cut in costs that could have a negative impact on future productivity. Of perhaps even more significance is the sustainability of such earnings. In this respect, while we advise investors to seek quality, both in terms of the top line and the bottom line, we accentuate the need to select stocks that may not only pass the quality test in terms of fundamentals but are also sufficiently liquid.

-5.1 -5.4 -7.7 -8.7 20.0 20.0 25.0 33.3

Significant Trades
400
LKR Mn

300 200 100 0 JKH GUAR COMB NDB

BRICS Performance Vs ASPI (YTD dollarised)

16.0% 8.0% 0.0% -8.0% -16.0% -24.0%

Market Liquidity (Turnover)

800
LKR Mn

600

400
200
04/09/2013 05/09/2013 06/09/2013 09/09/2013 10/09/2013

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 5667 19,882 22,976

8,209

3,124
22,977

1,672 2,833 136

%Chg. 1.11 3.17 0.6 0.20 1.16 0.99 1.00 1.23 1.35

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)

10.09.2013 11.82% 10.10% 10.56% 5.88% 6.30% 134.67 179.30 1,372.50 113.15

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