VANTAGE POINT. Inside Story. LOLC Securities Limited Monthly Issue December 2016

Transcription

1 VANTAGE POINT `1 LOLC Securities Limited Monthly Issue December 216 Focus: Upward trend in indices continued to close the market on a green note for the sixth consecutive day. Turnover recorded at 1.56 The parabolic SAR gives a neutral signal. Inside Story >>Globetrotter Monthly movements of top equity, commodity, currency and bond markets around the world and data related to major economies >>Macroscope Movements of the key economic indicators consisting of interest rates, inflation, external trade, key industries in Sri Lanka >>Market Direction Research Contacts Key indicators of the Sri Lankan equity market including major indices, foreign trades, technical aspects and regional comparison >>Counter of Focus A brief overview about a listed company in the Sri Lankan equity market including fundamental aspects. Shehan Bartholomeuz shehanb@lolcsecurities.com Gayan Rajakaruna gayanraj@lolcsecurities.com >>Relative Valuation Grid Hiruni Perera Consists of selected listed counters in the Sri Lankan equity market and their key fundamental and technical indicators and a list of counters trading below their respective net asset values. hirunipe@lolcsecurities.com 17-Jan-17

2 Equity Markets : Globetrotter US equity market improves Oil prices increase Gold prices decline Bond yields decline US and UK equity markets improved towards year end while Trumponomics and Brexit making outlook for 217 less predictable. S&P 5 Chg% M 2.18% FTSE 1 (UK) Chg% M: 5.77% Nikkei (Japan) Chg% M: 3.25% 2,28 2,26 2,24 2,22 2,2 2,18 2,16 2,14 Th 7,2 7,1 7, 6,9 6,8 6,7 6,6 6,5 2, 19,5 19, 18,5 18, 17,5 12/1/16 12/1/16 12/19/16 12/28/16 Source: Bloomberg Source: Bloomberg Source: Bloomberg Sensex (India) Chg% M.25% STI (Singapore) Chg% M: -1.63% HSI (Hong Kong)Chg% M: -3.84% 27, 26,8 26,6 26,4 26,2 26, 25,8 25,6 25,4 25,2 2,98 2,96 2,94 2,92 2,9 2,88 2,86 2,84 2,82 23, 22,5 22, 21,5 21, 2,5 12/1/16 12/1/16 12/19/16 12/28/16 Source: Bloomberg Source: Bloomberg Source: Bloomberg Oil prices increased during December while Gold prices continued to see a decline. Other commodities saw mixed Commodity Markets: results during the month. Crude Oil (WTI) Chg% M: 3.39% Gold Chg% M: -1.66% Copper Chg% M: -5.2% ,19 1,18 1,17 1,16 1,15 1,14 1,13 1,12 1,11 1, Source: Bloomberg Source: Bloomberg Source: Bloomberg Corn Chg% M: 6.1% Silver Chg% M: -3.57% Palm Oil Chg% M:.97% ,2 3,15 3,1 3,5 3, 2,95 Source: Bloomberg Source: Bloomberg Source: Bloomberg

3 Currency and Bond Market: USD appreciated against most of the currencies while Euro bond market yields declined during December. Currency GBP:USD USD:CNY USD:JPY EUR:USD AUD:USD USD:SGD USD:IDR USD:THB USD:MYR USD:INR % % % % % % % % % Chg % M USD Index Chg% M: 1.16% % Source: Bloomberg Bond Market Yields Europe (1year) -16 bps US (1 year) bps Japan (1 year) 2 bps Source: Bloomberg Source: Bloomberg Source: Bloomberg Country Pick : Argentina Argentina is located in Southern South America, bordering the South Atlantic ocean, between Chile and Uruguay. Argentina became Latin America s 3rd largest and South America s 2nd largest economy which benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Early in the 2th century Argentina had one of the highest per capita GDP levels in the world and the third largest economy in the developing world. Argentina was a highly affected country from crisis and following 25 years of boom and bust stagnation, Argentina's economy doubled in size from 22 to 213, and officially, income poverty declined from 54% in 22 to 5% by 213. Argentina's main industries include food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy and steel. GDP Main Industries Population Currency $ 69.9 billion Argentine pesos GDP per capita $1,514 Unemployment Rate 8.% Inflation 42.8% AWPLR 32.3% Exports $58.4 billion Imports Equity Market Cap Main Index Exchange Rate Food processing, Motor vehicle 43,886,748 $57.23 billion $ billion MERVAL Index ARS per USD Source: CIA Factbook and Bloomberg The last month of 216, Fed again raised interest rates with another two rate hike expectations in 217. In contrast, the European Central Bank s extension of quantitative easing underscored the policy divergence between the U.S. and euro area. While China s economy looks to have stabilized, uncertainties remain over the potential impact of new U.S. trade policies. The oil price received a boost over the quarter from Opec s decision to cut production, and was further helped by news that non-opec countries such as Russia would also reduce their oil output. Considering the investment outlook in the new year, political uncertainty is likely to continue in 217, with the start of Brexit negotiations, elections in France, Germany and the Netherlands, and the potential for early elections in Italy. Investors will also be waiting to see how US economic and foreign policy changes under President Trump.

4 1-Jan-15 1-Jun-15 1-Nov-15 1-Apr-16 1-Sep Feb May Aug-15 3-Nov Feb May Aug-16 3-Nov-16 1-Jan-15 1-Mar-15 1-May-15 1-Jul-15 1-Sep-15 1-Nov-15 1-Jan-16 1-Mar-16 1-May-16 1-Jul-16 1-Sep-16 Bank of Ceylon People's Bank Hatton National Bank Commercial Bank of Ceylon Sampath Bank Seylan Bank Union Bank of Colombo Pan Asian Banking Corporation Nations Trust Bank DFCC Bank NDB Bank Amana Bank HSBC Standard Chartered Bank Citi Bank Deutsche Bank Habib Bank Indian Bank Indian Overseas Bank MCB Bank State Bank of India Public Bank ICICI Bank Cargills Axis Bank Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 9/1/16 9/8/16 9/15/16 9/22/16 9/29/16 1/6/16 1/13/16 1/2/16 1/27/16 11/3/16 11/1/16 11/17/16 11/24/16 12/1/16 12/8/16 12/15/16 12/22/16 12/29/16 9/2/16 9/9/16 9/16/16 9/23/16 9/3/16 1/7/16 1/14/16 1/21/16 1/28/16 11/4/16 11/11/16 11/18/16 11/25/16 12/2/16 12/9/16 12/16/16 12/23/16 12/3/16 9/3/15 1/31/15 11/3/15 12/31/15 1/31/16 2/29/16 3/31/16 4/3/16 5/31/16 6/3/16 7/31/16 8/31/16 9/3/16 1/31/16 11/3/16 12/31/16 Macroscope T-bill rates remained flat on December AWPLR slightly declined Inflation increased Monetary sector Tbill Rate (364 days) AWPLR AWFDR % % % Source: Bloomberg Source: Bloomberg Source: Bloomberg Excess Liquidity Inflation Exchange Rate LKR Bn % LKR/USD /1/16 9/3/16 1/29/16 11/27/16 12/26/16 Source: CBSL Source: Bloomberg Source: Bloomberg Bank wise AWPR % 17. this month previous month Source: CBSL External Sector Trade Balance Exports and Imports Reserves USD Mn USD Mn Exports Imports USD Mn 8, 6, 4, 2, Source: CBSL Source: CBSL Source: CBSL

5 LKR/Kg Tourism 7-Jan-14 January 194,28 7-Mar-14 7-May-14 February 197,697 7-Jul-14 March 7-Sep ,841 7-Nov-14 April 136,367 7-Jan-15 7-Mar-15 May 125,44 7-May-15 June 7-Jul ,38 7-Sep-15 July 29,351 7-Nov-15 7-Jan-16 August 186,288 7-Mar-16 September 7-May ,499 7-Jul-16 October 15,419 7-Sep-16 7-Nov-16 November 167,217 7-Jan-17 December 224,791 LKR/Kg 7-Jan-14 11,783 12,82 North America 7-Mar-14 7-May-14 62,528 68,355 Western Europe 7-Jul-14 7-Sep-14 19,236 22,52 Eastern Europe 7-Nov-14 7-Jan-15 7-Mar-15 7,171 6,721 Middle East 7-May-15 7-Jul-15 32,738 36,345 East Asia 7-Sep-15 7-Nov-15 56,386 59,573 7-Jan-16 South Asia 7-Mar-16 7-May-16 13,655 15,61 Australia 7-Jul-16 7-Sep-16 2,617 2,874 Others 7-Nov-16 7-Jan-17 Tourist Arrivals Tourist Arrivals by Destination 25, 2, , 7, 6, 5, December- 215 December , 4, 1, 3, 2, 5, 1, Source: SLTDA Source: SLTDA Tourist Arrivals for the month of December 216 stood at posting a growth of 9% YOY. YTD tourist Arrivals for 216 was Maximum number of arrivals was witnessed from the Western Europe region while the figure stood at 68355, with a growth rate of 9%. Tea & Rubber Auction Tea Auction Prices Rubber Auction Prices High Medium Low Latex Scrap Sheet Source: forbes tea portal Source: CRTA High, Medium and Low Grown tea prices increased during December. However Sri Lanka had one of its worst tea crops in 216 compared to recent years. Russia being a key market for Ceylon tea, its WTO obligations to Sri Lanka on duty reduction on valued added teas will offer some respite to Sri Lankan brands in 217, but could be negated by high auction prices and low supply. Latex, Scrap and Sheet rubber prices increased during December. During December, inflation increased to 4.1% from 3.4% recorded in the previous month. Core inflation increased noticeably during December mainly reflecting the effect of government tax changes. YoY growth of credit extended to the private sector by commercial banks declined to 22% in October 216 compared to 25.6% in the previous month. Rupee liquidity in the domestic money market returned to surplus levels in December, while market interest rates, which increased in response to monetary tightening measures adopted by the Central Bank, appear to have broadly stabilized during the month. Foreign Reserves continues to dip sharply falling to a 5-month low putting pressure on exchange rates. Accordingly Rupee depreciated by 4% against USD during 216. Tourist arrivals continued to see a strong growth with December recording the highest tourist arrivals over last 3 years. Earnings from workers remittances also continued to grow at a healthy pace.

6 Market Direction ASPI down by 81 points S&P SL 2 down by 12 points Net foreign inflow during the month Focus: Source:bloomberg *figures are in LKR Mn except ASPI, S&P SL 2, PE and PBV ASPI S&P SL 2 Value M chg % Top Gainers Market saw a significant decline during December reflecting negative sentiment among investors on uncertainties on political and fiscal measures of the country /1/15 6/1/16 12/1/ /1/15 7/1/16 Top Losers ASPI 6, % S&P SL 2 3, % Turnover 24,343, % Volume 41,346, % Foreign Pur 18,859, % Foreign Sales 15,27, % PE % PBV % Market Cap 2,674,63 -.7% CODE Price % Volume CODE Price % Volume SFCL.N 9. 5.% 144,73 EDEN.N % SEMB.X % 3,758,645 BLUE.N % CALF.N % 11,937 AFSL.N % KDL.N % 141,736 SEMB.N % MERC.N 2, % 22,94 MFL.N % 23, , ,84 2,798,918 13,789 Top Turnover Top Volume Code Price % M Change Turnover Code Price % M Change Volume COCR.N % 1,831,589,18 COCR.N % JKH.N % 2,67,179,93 DIAL.N 1.5.% COMB.N % 2,24,77,734 PABC.N 2..% SEYB.N % 1,361,55,99 JKH.N 145..% LLUB.N % 836,472,825 RICH.N 8..% 99,45,77 77,552,782 29,899,52 17,32,52 16,175,934 Sector Bank Finance Ins Bev Food Tobacco Chemicals Pharms Construction Eng Diversified Footwear Textile Health Care Hotels Travels Investment Trust IT Land Property Manufacturing Motors Oil Palms Plantations Power & Energy Services Stores Supplies Telecom Trading Index gain 1.12% -2.81% -1.27% -.3% -3.8% 3.27% -.84% -.45% -2.62% Moving Average Convergence Divergence (MACD) Dec-16 6-Dec Dec Dec Dec Dec MACD_DIFF MACD MACD_SIGNAL -3.95% Relative Strength Index (RSI) 1.47% % -6.72%.68% % % -1.46%.22% 1-Dec-16 6-Dec Dec Dec Dec Dec-16.% -1.58% RSI Middle Limit Upper Limit Lower Limit MACD was below the signal from second half of the month reflecting a negative sentiment. RSI was in the bearish region throughout the month.

7 Foreign Interest of Big Cap counters Units: Monthly Prices in LKR, foreign stakes in number of shares Company John Keells Holdings Plc Ceylon Tobacco Company Plc Commercial Bank of Ceylon Plc Nestle Lanka Plc Hatton National Bank Plc Dialog Axiata Plc Melstacorp Limited Sri Lanka Telecom Plc Sampath Bank Plc Cargills (Ceylon) Plc Chevron Lubricants Lanka Plc ,345,88 66,874,739 (3,528,931) Carsons Cumberbatch Plc ,71,812 Dfcc Bank DFCC Bank Aitken Spence Plc Asian Hotels & Properties Plc National Development Bank Plc C T Holdings Plc Hayleys Plc Aitken Spence Hotel Holdings Plc Month end Price Month Ago Foreign Stake 72,514,82 182,232, ,197,566 51,561,821 9,47,23 7,635,164, ,18, ,531,617 29,645,628 15,74,26 62,35,379 21,654, ,462,929 7,599,241 27,193,68 29,191,862 2,797,585 2,95,744 Foreign Stake month ago 74,171,314 7,632,342 Difference 16,343,56 182,181,453 5, ,61,495 51,564,519 9,219,787 7,634,134, ,348,68 812,539,824 29,56,347 15,22,36 39,71,888 66,1,476 21,654, ,373,32 27,21,686 29,216,8 2,794,951 2,948,744 1,596,71 (2,698) (172,557) 1,29,417 (329,99) (8,27) 85,281 (146,1) (76) (3,651,97) (217) (2,91,373) (33,11) (8,618) (24,938) 2,634 2, ASPI Contributors Company Month Ago Ceylinco Insurance Co Plc Cargills (Ceylon) Plc Commercial Bank Of Ceylon Pl Hatton National Bank Plc Senkadagala Finance Co Plc Property Development Plc Mercantile Investments & Fin Ceylon Beverage Holdings Plc Hayleys Plc Ct Holdings Plc Asian Hotels & Properties Pl Asiri Hospitals Holdings Plc Nestle Lanka Plc Lanka Hospital Corp Plc Chevron Lubricants Lanka Plc Teejay Lanka Plc Carson Cumberbatch Plc Lanka Ioc Plc Lion Brewery Ceylon Plc Commercial Credit & Fin Plc Lanka Orix Leasing Co Plc Ceylon Cold Stores Plc John Keells Holdings Plc Ceylon Tobacco Co Plc Units: Monthly Prices and Turnover in LKR, Contribution to ASI in points Month end Price Volume 6, ,377 15,267,23 1,37, ,325, ,877 99,45,77 633,382 2,24,77, ,73 12,966,57 27,63 2,611 1,69,331 41,857 63,22 217, , ,297 11,41,219 64,714 4,329,375 5,244,871 4,616,755 1,71,566 6,68,27 836,472,825 1, ,341 33,928, ,134,629 17,32,52 2,67,179,93 297,69 Turnover 8,329,978 98,198,637 7,621,511 12,167, ,469,6 21,14,87 1,831,589,18 49,274,44 252,299,525 Contribution to ASI ,315, ,94 58,319, (1.56) (1.67) (1.68) (2.78) (2.89) (3.73) (3.87) (4.98) (5.78) 19, ,676,666 (1.98) (16.22) (28.29)

8 Performance of the Sri Lankan Equity Market Net Foreign Inflow December 4,693 LKR Mn YTD: 1,953 LKR Mn LKR Mn 3,5, 2,892,796 3,, 2,5, 2,, 1,5, 1,356,195 1,, 5, 45,446 13,535 36,871 29,31 44,744 66,12 8,342 25,311 16,216 12,321-5, 1-Dec -25,261 5-Dec -15,622 7-Dec 9-Dec 15-Dec 19-Dec 21-Dec -97,94 23-Dec -4,21-1,22 28-Dec -1,, -556,67 Source: Bloomberg Seasonality Behavior of ASPI Highest 6 years 7, ,868 December 6,368 8, 7,5 7, 6,5 6, 5,5 5, 4,5 4, Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec Source: Bloomberg Lowest 6 years 4, ,862 December 6,23 Indices Performance /1/16 12/7/16 12/13/16 12/19/16 12/25/ Sri Lanka Thailand Pakistan Vietnam MSCI frontier MSCI Emerging MSCI world Source: Bloomberg PE ratios of markets Sri Lanka Thailand Pakistan Vietnam MSCI frontier MSCI Emerging MSCI world Sri Lanka Thailand Pakistan Vietnam MSCI frontier MSCI Emerging MSCI world Source: Bloomberg Indices in the region recorded a mixed performance during the month. PE of the Sri Lankan equity market stood below the MSCI Frontier, MSCI Emerging and MSCI world.

9 LKR Mn LKR Mn Counter of Focus AAIC SL Equity Softlogic Life Insurance PLC (Earlier Asian Alliance Insurance PLC) is one of the fastest growing and innovative life insurance solution provider and has reached amongst top six life insurers within the period of 16 years. AAIC holds 5th place with 8% market share of total GWP and 6th place by total assets by 215. AAIC is a member of Softlogic Group, leading conglomerate and one of Sri Lanka s major corporate success stories with interests in retail, healthcare, IT, leisure, financial services and automobiles. AAIC used to operate as a composite insurance solution provider and since October 216 it operates as a life insurance service provider after the divestment of its General Insurance business to Fairfax Asia Limited for LKR million. Sri Lanka's life insurance industry is expected to have a promising growth with low penetration, low industry competition and rising GDP per capita. Accordingly AAIC being the highest growth life insurer could conveniently capture industry rise and outperform peers in the future. Softlogic Life Insurance PLC Share Details Bloomberg Ticker Share Price (LKR) Market Cap (LKR MN) Issued Quantity (MN) Share Price Performance AAIC SL 2. 7, m 6m 12m Absolute 3.9% -6.98% 29.3% Relative To ASPI 4.46% -3.43% 34.45% 52 W High/Low 24.9/12 (LKR) 52 W Avg. Volume 37,49 Beta (6 months) 2.2 Graph 1: Revenue 25 LKR 7, 6,237 6,16 6, 5, 4,229 4,237 4, 2,859 3, 2, 1, (9M) Source: Bloomberg Graph 2: Net Profit 1, Dec-15 Apr-16 Aug-16 Dec-16 Source: Bloomberg Business Nature AAIC is one the fastest growing life insurance service provider having experinece in the insurance industry over 15 years and recognized as one of the Asia's most responsible business entity (9M) Shareholder Details Softlogic Capital Ltd 59.2% Nederlandse Financierings-Maa 19.% State Street Munich 19.% Sandwave Limited.4% Source: Bloomberg Commercial Trust Technologies.3% Figures in LKR Mn 216 (9M) Revenue 4,229 6,237 6,16 4,237 2,859 Net Profit EPS (LKR) PE (X) PBV Div. Yield (%) ROE (%) Debt/Equity (%) CAGR 1.3% 35.9% 74.4% -2.2% 14.3% % 83.1%

10 Relative Valuation Grid Key : Attractive compared to the sector XX Attractive compared to both market and sector XX Name Price (LKR) % chg M Market Cap* ROE % PE PBV Div. Yield % Beta Market Banks, Finance and Insurance Aia Insurance Lanka Plc 28.1.% 8, Abans Finance Plc % 1, Arpico Insurance Ltd % Alliance Finance Co Plc % 2, Arpico Finance Co Plc % 1, Amana Bank Ltd % 5, Amana Takaful Plc % 1,62 (26.56) Amw Capital Leasing & Financ 22.4.% Asia Capital Plc % 1,24 (5.62) Asia Asset Finance Plc % 1, Softlogic Life Insurance Plc % 7, Associated Motor Finance Co % 2, Bimputh Finance Plc % 6, Colombo Trust Finance Plc % 563 (.46) Commercial Credit & Fin Plc % 17, Citizens Development Busines % 3, Central Finance Co Plc 1..% 21, Chilaw Finance Plc % Ceylinco Insurance Co Plc % 34, First Capital Holdings Plc % 2, George Steuart Finance Plc % Commercial Leasing & Finance 3.3.% 21, Commercial Bank of Ceylon Plc % 127, DFCC Bank % 32, Hatton National Bank Plc % 89, Entrust Securities Plc Hnb Assurance Plc % 2, Housing Development Fin Corp % 3, Janashakthi Insurance Co Plc % 11, Lanka Orix Finance Plc % 7, Lanka Orix Leasing Co Plc % 36, Lb Finance Plc % 17, Lanka Ventures Plc % 2, Merchant Bk Of Sri Lnka & Fi % 2, Mercantile Investments & Fin % 7, National Development Bank Pl % 25, Nation Lanka Finance Plc % Nations Trust Bank Plc % 18, Pan Asia Banking Corp Plc % 5, People'S Leasing & Finance P % 27, People'S Merchant Finance Pl % 1,148 (39.84) Smb Leasing Plc % 1, Sinhaputhra Finance Plc % 1, Sampath Bank Plc % 46, Senkadagala Finance Co Plc 9. 5.% 5, (.2) Softlogic Capital Plc 5.5.% 3, Softlogic Finance Plc % 2, Swarnamahal Financial Servic % (.67)

11 Name Price (LKR) % chg M Market Cap* ROE % PE PBV Div. Yield % Beta Sanasa Development Bank Plc % 4, Seylan Bank Plc % 25, Singer Finance Lanka Plc 19.2.% 3, Finance Co Plc/The % (.8) Union Assurance Plc % 8, Union Bank Of Colombo Plc % 16, Vallibel Finance Plc % 2, Multi Finance Plc % 294 (6.32) Amana Bank Ltd % 5, Commercial Leasing & Finance 3.3.% 25, Sinhaputhra Finance Plc % 1, Swarnamahal Financial Servic % (.67) Beverage, Food and Tobacco Bairaha Farms Plc % 2, Ceylon Beverage Holdings Plc % 13,653 (7.18) Cargills (Ceylon) Plc % 43, Ceylon Cold Stores Plc % 71, Dilmah Ceylon Tea Co Plc 61.5.% 12, Ceylon Tobacco Co Plc % 151, Convenience Foods Lanka Plc 3..% Distilleries Co Of Sri Lanka % Harischandra Mills Plc % 2, Hva Foods Plc % 399 (4.74) Keells Food Products Plc % 4, Lion Brewery Ceylon Plc % 37,2 (1.41) Lanka Milk Foods Cwe Plc % 4, Lucky Lanka Milk Procssng-V % 563 (3.66) Nestle Lanka Plc % 17, Renuka Agri Foods Plc % 1, Raigam Wayamba Salterns Plc 2..% Renuka Foods Plc % 2, Tea Smallholder Factories 24..% 72 (.16) Three Acre Farms Plc % 3, Chemicals and Pharmaceuticals CIC Holdings Plc % 8, Chemanex Plc % Haycarb Plc % 4, Industrial Asphalts Ceylon % 25 (25.6) Lankem Ceylon Plc % 2,474 (22.63) J.L. Morison Son & Jones % 2, Muller & Phipps Ceylon Plc % (.5) Pc Pharma Plc Standard Capital Plc % (.3) Union Chemicals Lanka Plc % Construction and Engineering Access Engineering Plc % 24, Colombo Dockyards Plc % 5,648 (12.8) Lankem Developments Plc % 36 (22.36) Mtd Walkers Plc % 6,874 (4.99) Diversified Aia Insurance Lanka Plc 65..% 26, Adam Capital Plc % Adam Investments Plc % 899 (.9) Browns Investments Ltd 1.4.% 5,28 (8.54) (.38) Ct Holdings Plc % 22, Carson Cumberbatch Plc % 34, (.16)

12 Name Price (LKR) % chg M Market Cap* ROE % PE PBV Div. Yield % Beta Dunamis Capital Plc % 2,89 (16.53) Expolanka Holdings Plc % 12, Hayleys Plc % 2, Hemas Holdings Plc 98..% 56, John Keells Holdings Plc % 21, Richard Pieris & Co Plc 8..% 16, Softlogic Holdings Plc % 1, Sunshine Holdings Plc % 6, Taprobane Holdings Ltd % 4,312 (47.5) Colombo Fort Land & Bldg Co 2..% 3,6 (5.96) Browns Capital Plc % 1,55 (3.88) Melstacorp Ltd % 77, Vallibel One Plc % 2, Footwear and Textiles Ceylon Leather Products Plc % 2, Hayleys Fabric Plc % 3, Odel Plc % 6, Healthcare Asiri Hospitals Holdings Plc % 22, Asiri Surgical Hospital Plc % 5, Ceylon Hospitals Plc % 2, Lanka Hospital Corp Plc % 14, Nawaloka Hospitals Plc % 6, Singhe Hospitals Ltd % 757 (19.4) Hotels and Travels Aitken Spence Hotel Holdings % 14, Anilana Hotels & Properties % 888 (7.45) Amaya Leisure Plc % 3, Asian Hotels & Properties Pl % 25, Beruwala Resorts Plc % 66 (3.78) Bansei Royal Resorts Hikkadu % Ceylon Hotels Corp Plc % 3, Citrus Leisure Plc % Hikkaduwa Beach Resort Ltd % Kalpitiya Beach Resort Plc % Dolphin Hotels Plc % 1, Eden Hotel Lanka Plc % 1,426 (1.63) Galadari Hotels Lanka Plc % 5, Fortress Resorts Plc % 1, Hunas Falls Hotels Plc % Hotel Sigiriya Plc % John Keells Hotels Plc % 15, Kandy Hotels Co 1938 Plc % 3, Lighthouse Hotel Plc/The % 2, Mahaweli Reach Hotels Plc % Marawila Resorts Plc % 841 (1.76) Nuwara Eliya Hotels Co Plc 146..% 2, Palm Garden Hotels Plc % 1,224 (3.98) Renuka City Hotels Plc % 2, Royal Palms Beach Hotel Plc % 1, Pegasus Hotels Of Ceylon Plc % Tangerine Beach Hotels Plc % 1, Ramboda Falls Plc % Serendib Hotels Plc % 2, Sigiriya Village Hotels Plc 6..5% Tal Lanka Hotels Plc % 3,

13 Name Price (LKR) % chg M Market Cap* ROE (%) PE PBV Div. Yield % Beta Trans Asia Hotels Plc % 18, The Kingsbury Plc % 3, Waskaduwa Beach Resort Plc % 888 (11.61) IT E-Channelling Plc % Investment Trust Ascot Holdings Plc % Ceylon Guardian Investment % 8, Ceylon Investment Plc % 4, Colombo Fort Investments Plc % 452 (2.32) Colombo Investment Trust Plc % 572 (3.3) Guardian Capital Partners Pl % 1, Lanka Century Investments Pl % 4,123 (19.34) Lee Hedges Plc % 1, Renuka Holdings Plc % 1, Land and Property C T Land Development Plc % 2, Cargo Boat Development Co % City Housing & Real Estate C % 12 (8.1) Colombo Land & Dvlp Co Plc % 5, Commercial Development Co % (.38) East West Properties Plc % 2,32 (11.85) Equity Two Plc % 1, Kelsey Development Plc % On'Ally Holdings Plc % Overseas Realty Ceylon Plc 2..% 17, Property Development Plc % 6, Seylan Developments Plc % 2, Serendib Land Plc % Serendib Engineering Group P % York Arcade Holdings Plc % Millennium Housing Developer % Manufacturing Acl Cables Plc % 4, Abans Electricals Plc % 4, Acl Plastics Plc 22..% Acme Printing & Packaging Pl % 255 (3.54) Alufab Plc % 423 (2.) Blue Diamonds Jewellery Worl Bogala Graphite Lanka Plc % 1, Ceylon Grain Elevators Plc % 4, Chevron Lubricants Lanka Plc % 37, Central Industries Plc Dankotuwa Porcelain Plc % 1, Dipped Products Plc % 5, Hayleys Fibre Plc % Kelani Cables Plc % 2, Kelani Tyres Plc % 6, Lanka Aluminium Indus Plc % 1, Lanka Ceramic Plc % 3, Lanka Tiles Plc % 5, Lanka Walltile Plc % 5, Laxapana Batteries Plc % Orient Garments Plc Piramal Glass Ceylon Plc % 5, Printcare Plc % 3,

14 Name Price (LKR) % chg M Market Cap* ROE (%) PE PBV Div. Yield % Beta Regnis Lanka Plc % 1, Richard Pieris Exports Plc % 2, Royal Ceramics Lanka Plc % 12, Samson International Plc % 12, Sierra Cables Plc 3.3.% 12, Singer Industries Ceylon Plc % 12, Swadeshi Industrial Wrks Plc 135..% 12,32 (12.5) Swisstek Ceylon Plc % 1, Teejay Lanka Plc % 15, Tokyo Cement Co Lanka Plc % 18, Agstar Plc % 1, Motors Autodrome Plc % Colonial Motors Plc % 1,295 (2.82) Diesel & Motor Engineering % 5, Lanka Ashok Leyland Plc % 3, Sathosa Motors Plc % 1, United Motors Lanka Plc % 8, Oil Palm Bukit Darah Plc % 69, Good Hope Plc/The % 11, , Indo-Malay Plc/The % 1, Selinsing Plc % 9, Shalimar Malay Plc % 15, Plantations Agalawatte Plantations Plc % Aitken Spence Plantation Man 45.5.% Balangoda Plantations Plc % 288 (11.73) Bogawantalawa Tea Estates % 812 (3.57) Elpitya Plantations Plc % 1, Hapugastenne Plantations Plc % 723 (9.4) Horana Plantations Plc % 448 (1.14) Kahawatte Plantations Plc % 3,12 (9.93) Kegalle Plantation Plc % 1, Kelani Valley Plantations Pl 59.9.% 2,37 (7.62) Kotagala Plantations Plc % 356 (28.75) Malwatte Valley Plant-Voting 2.9.% 75 (3.26) Madulsima Plantations Plc % 751 (8.78) Maskeliya Plantation Plc % 426 (42.63) Namunukula Plantations Plc % 1, Talawakelle Tea Estates Plc % Watawala Plantation Plc % 4, Udapussellawa Plantation Plc % 376 (18.27) Power and Energy Lotus Hydro Power Plc % Lanka Ioc Plc % 16, Laugfs Gas Plc - Voting % 12, Panasian Power Plc 3..% 1, Resus Energy Plc % 1, Vallibel Power Erathna Plc % 6, Vidullanka Plc 5.5.% 4, Mackwoods Energy Plc 2.9.% 6 (1.47) Services Asia Siyaka Commodities Plc % Ceylon Tea Brokers Plc % Ceylon Printers Plc % 33 (68.4)

15 Name Price (LKR) % chg M Market Cap* ROE (%) PE PBV Div. Yield % Beta John Keells Plc % 3, Kalamazoo Systems Plc 84.8.% 4 (47.18) Lake House Printers & Publis 13..% Mercantile Shipping Co Plc 7.1.% (.18) -.46 Paragon Ceylon Plc % 6 (152.96) Stores and Supplies Colombo Pharmacy Co Plc % 1, E.B. Creasy & Co Plc 125..% 3,169 (2.17) Gestetner Of Ceylon Plc % Hunter & Co Plc % 2, Telecommunication Dialog Axiata Plc 1.5.% 85, Sri Lanka Telecom Plc 36..% 82, Trading Brown & Co Plc % 6,839 (3.78) Ceylon & Foreign Trades Plc % 6, Cw Mackie Plc % 1, Eastern Merchants Plc % 728 (.13) Singer Sri Lanka Plc % 15, Office Equipment Plc 68..% Tess Agro Plc 1.3.% 364 (22.8) *Market Cap units- LKR Mn

16 Stocks trading below Net Asset Value Abans Electricals Plc Elpitya Plantations Plc Palm Garden Hotels Plc Acl Cables Plc Expolanka Holdings Plc Pan Asia Banking Corp Plc Acl Plastics Plc Finance Co Plc/The Pegasus Hotels Of Ceylon Plc Acme Printing & Packaging Pl Galadari Hotels Lanka Plc Raigam Wayamba Salterns Plc Adam Capital Plc Hapugastenne Plantations Plc Renuka Agri Foods Plc Agalawatte Plantations Plc Haycarb Plc Renuka City Hotels Plc Aitken Spence Hotel Holdings Hayleys Plc Renuka Foods Plc Aitken Spence Plc Hikkaduwa Beach Resort Ltd Renuka Holdings Plc Alliance Finance Co Plc Horana Plantations Plc Royal Ceramics Lanka Plc Amw Capital Leasing & Financ Housing Development Fin Corp Royal Palms Beach Hotel Plc Ascot Holdings Plc Huejay Intl Investments Plc Samson International Plc Asia Asset Finance Plc Hunas Falls Hotels Plc Sanasa Development Bank Plc Asia Capital Plc Hunter & Co Plc Seylan Developments Plc Asia Siyaka Commodities Plc Hva Foods Plc Sigiriya Village Hotels Plc Autodrome Plc J.L. Morison Son & Jones Singer Industries Ceylon Plc Balangoda Plantations Plc John Keells Hotels Plc Smb Leasing Plc Bogawantalawa Tea Estates Kalpitiya Beach Resort Plc Softlogic Finance Plc Brown & Co Plc Kandy Hotels Co 1938 Plc Swarnamahal Financial Servic Browns Beach Hotels Plc Kegalle Plantation Plc Talawakelle Tea Estates Plc Browns Capital Plc Kelani Cables Plc Tangerine Beach Hotels Plc Browns Investments Ltd Kelani Valley Plantations Pl Tea Smallholder Factories Bukit Darah Plc Kotagala Plantations Plc Udapussellawa Plantation Plc C T Land Development Plc Lanka Cement Plc Union Bank Of Colombo Plc Cargo Boat Development Co Lanka Century Investments Pl United Motors Lanka Plc Carson Cumberbatch Plc Lanka Ceramic Plc Vallibel One Plc Central Finance Co Plc Lanka Ioc Plc Waskaduwa Beach Resort Plc Central Industries Plc Lanka Milk Foods Cwe Plc York Arcade Holdings Plc Ceylon & Foreign Trades Plc Lanka Orix Finance Plc Ceylon Guardian Investment Lanka Orix Leasing Co Plc Ceylon Hotels Corp Plc Lanka Tiles Plc Ceylon Investment Plc Lanka Walltile Plc Ceylon Leather Products Plc Lankem Ceylon Plc Chemanex Plc Lankem Developments Plc Citizens Development Busines Lee Hedges Plc Citrus Leisure Plc Lighthouse Hotel Plc/The Colombo Dockyards Plc Lotus Hydro Power Plc Colombo Fort Investments Plc Madulsima Plantations Plc Colombo Fort Land & Bldg Co Mahaweli Reach Hotels Plc Colombo Investment Trust Plc Malwatte Valley Plant-Voting Colombo Pharmacy Co Plc Marawila Resorts Plc Colonial Motors Plc Maskeliya Plantation Plc Commercial Development Co Mercantile Shipping Co Plc Cw Mackie Plc Merchant Bk Of Sri Lnka & Fi Dankotuwa Porcelain Plc Mtd Walkers Plc Dfcc Bank Plc Namunukula Plantations Plc Diesel & Motor Engineering National Development Bank Pl Dipped Products Plc Nuwara Eliya Hotels Co Plc Dolphin Hotels Plc Odel Plc Eastern Merchants Plc On'Ally Holdings Plc Eden Hotel Lanka Plc Overseas Realty Ceylon Plc

17 Head Office LOLC Securities Limited No.481,, T.B.Jayah Mawatha Colombo 1, Sri Lanka Tel: Fax: Branches Kurunegala Branch No 6, 1st Floor, Union Assurance Building, Rajapilla Mawatha Kurunegala, Sri Lanka Tel: Fax: Matara Branch 1 st floor, E.H. Cooray Towers, No 24, Anagarika Dharmapala Mw. Matara, Sri Lanka Tel: Contact Us Sriyan Gurusinghe CEO/Managing Director / sriyang@lolcsecurities.com Manjula Kumarasinghe COO - Sales & Marketing / manjulak@lolcsecurities.com Sales Head Office Maniesh Rodrigo Assistant General Manager Sales / manieshr@lolcsecurities.com Samadhi Jayasinghe Manager Institutional Sales / samadhij@lolcsecurities.com Imesh Fernando Assistant Manager Sales / imeshf@lolcsecurities.com Naleen Sadeesh Investment Advisor / naleensa@lolcsecurities.com Damith Chaminda Investment Advisor / damithc@lolcsecurities.com Dushan Rajaguru Investment Advisor / dushanr@lolcsecurities.com Dinuka Niwantha Investment Advisor / dinukan@lolcsecurities.com Niraj Jayamanne Investment Advisor / nirajj@lolcsecurities.com Ushan De Silva Investment Advisor / ushand@lolcsecurities.com John Ravindu Trainee investment Advisor / johnr@lolcsecurities.com Isuri Ruwanka Business Development Associate / isurisab@lolcsecurities.com Kurunegala Branch Rohana Chandrasiri Anurudda Rajakaruna Nuwan Fernando Assistant General Manager / Investment Advisor / Investment Advisor / rohanac@lolcsecurities.com anuruddhar@lolcsecurities.com nuwanfe@lolcsecurities.com Matara Branch Bimal Malinda Ahamed Aadil Thilina Sameera Branch Head / Investment Advisor / Investment Advisor / bimalm@lolcsecurities.com aadila@lolcsecurities.com thilinawa@lolcsecurities.com RESEARCH Shehan Bartholomeuz Head of Research / shehanb@lolcsecurities.com Gayan Rajakaruna Senior Research Analyst / gayanraj@lolcsecurities.com Hiruni Perera Asso. Research Analyst / hirunipe@lolcsecurities.com LOLC Securities Limited, a trading member of the Colombo Stock Exchange (CSE), is engaged in facilitating stock trading transactions at Colombo Stock Exchange, providing investment research on Sri Lankan equity, providing investment planning advices with services such as portfolio construction & formulation of IPS (Investment Policy Statement) and facilitating other investment opportunities in the country including private equity. Disclaimer: This report is based on information from sources that LOLC Securities Limited believes to be reliable. Whilst reasonable care has been taken to ensure accuracy of the information presented in the report, LOLC Securities Limited does not give a guarantee on the accuracy of the information presented in the paper nor will take the responsibility on investment decisions taken based on the information provided by the report and hence LOLC Securities Limited nor its employees accepts any liability whatsoever for any loss arising from investments decisions taken using the information provided in this paper. The reader also should note this paper does not give recommendations to any particular category of investors and investor should consult investment advisors for further clarifications regarding risks involved in investing in equity market. LOLC Securities Limited or its employees may or may not hold positions in the securities discussed in the report and the information provided in the report should not be construed as a buy or sell instruction for any securities mentioned in the report. LOLC SEC Research Reports are also available at Bloomberg LOLC <GO>