Week ending 22-June 14-June +/- ASPI 6, , % S&P SL20 3, , % Banking & Finance 16, ,

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1 (Turnover LKR Bn) ASPI ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES ASPI drops 103 points to trade below 6300 levels.. Indices vs. Turnover (18 th Jun-22 nd Jun) 1Q 18 GDP growth falls to 3.2% Y-o-Y ASPI 1.63% S&P SL % The Bourse ended Cont. P2 Foreign Investors Closed the Week in... Cont. P3 The ASPI extended its losing streak. Cont. P4 Economic Snapshot P5 6,350 6,320 6,290 6,260 6,230 6, ASPI S&P SL20 18-Jun 19-Jun 20-Jun 21-Jun 22-Jun 18-Jun 19-Jun 20-Jun 21-Jun 22-Jun 3,550 3,520 3,490 3,460 3,430 3,400 S&P SL20 KEY STATISTICS Week ending 22-June 14-June +/- ASPI 6, , % S&P SL20 3, , % Banking & Finance 16, , % Food & Beverage 24, , % Diversified 1, , % Hotel & Travel 2, , % Plantations % Manufacturing 3, , % Turnover (LKR Bn) % Foreign Buying (LKR Mn) 1, % Foreign Selling (LKR Mn) 1, , % Daily Average Turnover (LKR Bn) % Daily Average Foreign Buying (LKR Mn) % Daily Average Foreign Selling (LKR Mn) % TOP 10 GAINERS TOP 10 LOSERS Code Opening Closing WoW % Change S M B LEASING [NV] SEMBX % PRINTCARE PLC CAREN % AMBEON CAPITAL TAP N % AMANA LIFE ATLLN % SERENDIB HOTELS [NV] SHOTX % SLT SLTLN % MADULSIMA MADUN % KINGSBURY SERVN % EDEN HOTEL LANKA EDENN % COLOMBO LAND CLNDN % Code Opening Closing WoW % Change ADAM CAPITAL PCHHN % TESS AGRO [NV] TESSX % MULLERS MULLN % HUEJAY HUEJN % E B CREASY EBCRN % FORT LAND CFLBN % MERC. SHIPPING MSL N % CFI CFI N % CENTRAL IND. CINDN % CIT CITN % 1

2 ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Market Review Indices The Bourse ended the week on a negative note as the ASPI decreased by points (or -1.63%) to close at 6, points, while the S&P SL20 Index also decreased by points (or -2.80%) to close at 3, points. Turnover & Market Capitalization JKH was the highest contributor to the week s turnover value, contributing LK R0.92Bn or 30.88% of total turnover value. Hemas Holdings followed suit, accounting for 15.06% of turnover (value of LKR 0.45Bn) while Sampath Bank contributed LKR 0.17Bn to account for 5.67% of the week s turnover. Total turnover value amounted to LKR 2.97Bn (cf. last week s value of LKR 2.00Bn), while daily average turnover value amounted to LKR 0.59Bn (18.43% W-o-W) compared to last week s average of LKR 0.50Bn. Market capitalization meanwhile, decreased by 1.60% W-o-W (or LKR 47.23Bn) to LKR 2,909.41Bn cf. LKR 2,956.65Bn last week. Liquidity (in Value Terms) The Diversified sector was the highest contributor to the week s total turnover value, accounting for 49.34% (or LKR 1.46Bn) of market turnover. Sector turnover was driven primarily by JKH and Hemas Holdings which accounted for 93.11% of the sector s total turnover. The Banking, Finance & Insurance sector meanwhile accounted for 25.03% (or LKR 0.74Bn) of the total turnover value, with turnover driven primarily by Sampath Bank, Commercial Bank, NDB and HNB which accounted for 58.95% of the sector turnover. The Manufacturing sector was also amongst the top sectorial contributors, contributing 11.54% (or LKR 0.34Bn) to the market driven by Lanka Walltile and Piramal Glass which accounted for 60.45% of the sector turnover. Liquidity (in Volume Terms) The Banking, Finance & Insurance sector dominated the market in terms of share volume, accounting for 28.43% (or 26.30Mn shares) of total volume, with a value contribution of LKR 0.74Bn. The Manufacturing sector followed suit, adding 23.22% to total turnover volume as 21.48Mn shares were exchanged. The sector s volume accounted for LKR0.34Bn of total market turnover value. The Diversified sector meanwhile, contributed 20.85Mn shares (or 22.54%), amounting to LKR1.46Bn. Top Gainers & Losers SMB Leasing [NV] was the week s highest price gainer; increasing 50.0% W-o-W from LKR0.20 to LKR0.30. Printcare gained 20.0% W-o-W to close at LKR Ambeon Capital (+11.6% W-o-W) and Amana Life (+9.1% W-o-W) were also amongst the top gainers. Adam Capital was the week s highest price loser; declining 33.3% W-o-W to close at LKR0.40 while Tess Agro [NV] (-28.6% W-o-W), Mullers (-22.2% W-o-W) and Huejay (-22.0% W-o-W) were also amongst the top losers over the week. TOP 10 TURNOVERS Code Opening Closing Value (Rs. Mn) JKH JKH N HEMAS HOLDINGS HHL N SAMPATH SAMPN LANKA WALLTILE LWL N DIALOG DIALN COMMERCIAL BANK COMBN NAT. DEV. BANK NDB N NESTLE NESTN HNB HNB N PIRAMAL GLASS GLASN

3 LKR. Mn LKR. Mn ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Market Review (Cont d) TOKYO CEMENT[X] DISTILLERIES CENTRAL IND. S M B LEASING CHEVRON HEMAS HOLDINGS MERCHANT BANK RICHARD PIERIS Net Foreign Purchases (14 Jun-22 Jun) TEEJAY LANKA DIALOG* Volume Change ('000s) Net Foreign Sales (14 Jun-22 Jun) Volume Change ('000s) (1,000) (800) (600) (400) (200) - *Volume change of Dialog (9.92Mn shares), Piramal Glass (10.85Mn shares) and JKH(1.50Mn Shares) from 14 th Jun 22 nd Jun not displayed. ACCESS ENG SL TOKYO CEMENT MARAWILA RESORTS COMMERCIAL BANK [X] MELSTACORP FIRST CAPITAL COMMERCIAL BANK BROWNS CAPITAL JKH* PIRAMAL GLASS* Foreign investors closed the week in a net selling position with total net outflow amounting to LKR 0.16Bn relative to last week s total net outflow of LKR 0.22Bn (26.6% W-o-W). Total foreign purchases increased by 61.8% W-o-W to LKR 1.42Bn from last week s value of LKR 0.88Bn, while total foreign sales amounted to LKR 1.59Bn relative to LKR 1.10Bn recorded last week (44.17% W-o-W). In terms of volume Dialog & Teejay Lanka led foreign purchases while Piramal Glass & JKH led foreign sales. In terms of value Dialog & Hemas Holdings led foreign purchases while JKH & Commercial Bank led foreign sales. Net Foreign Purchases (By Transaction Value) Foreign Holding (%) Net Change Value* 22/06/18 14/06/18 (LKR. Mn) DIALOG 94.44% 94.32% 9,921, HEMAS HOLDINGS 31.17% 31.13% 237, SAMPATH 22.92% 22.89% 72, CHEVRON 20.96% 20.87% 216, TEEJAY LANKA 45.27% 45.20% 510, CARGILLS 6.66% 6.64% 60, CENTRAL IND. 4.04% 3.08% 189, RICHARD PIERIS 73.83% 73.81% 436, COLD STORES 10.89% 10.89% 3, BAIRAHA FARMS 3.85% 3.71% 21, Net Foreign Sales (By Transaction Value) Foreign Holding (%) Value* Net Change 22/06/18 14/06/18 (LKR. Mn) JKH 57.90% 58.01% (1,498,007) (224.70) COMMERCIAL BANK 34.26% 34.36% (887,860) (109.38) PIRAMAL GLASS 62.88% 64.02% (10,846,939) (52.07) FIRST CAPITAL 0.27% 0.62% (346,320) (10.25) HNB 35.90% 35.91% (27,409) (6.39) MELSTACORP 26.30% 26.31% (112,510) (5.97) COMMERCIAL BANK[X.0000] 25.22% 25.30% (54,085) (5.19) BROWNS CAPITAL 0.71% 0.78% (982,862) (3.93) NAT. DEV. BANK 14.45% 14.46% (18,966) (2.35) CEYLON TOBACCO 97.52% 97.52% (1,787) (1.99) Note: *Value based on closing price and not on actual traded price Please note that the foreign shares data displayed above include private transfers done outside of the market. 900 Foreign Purchases Vs. Sales Foreign Purchases Foreign Sales 650 Week Ending Net Position of Foreign Holdings , Jun 19-Jun 20-Jun 21-Jun 22-Jun -1, Jun 08-Jun 14-Jun 22-Jun 3

4 ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Announcements for the Week Dividend Announcements No dividend announcements for the week. Point of View The ASPI extended its losing streak for the 5th consecutive week to push past the key psychological mark of 6,300 points to end at 6, The main share index recorded the highest weekly loss for the year during the week as ASPI lost 103 points (1.63%) as Heavy weight JKH dropped 4.0% to end at Rs.150. The YTD loss on the Benchmark price Index by end-week was 2.2%, highlighting the ~313 point (4.8%) dip since late April when the ASPI began to drop. Notably, ASPI had ended a week in a positive note only once since late April. More Liquid S&P20 SL index also dropped 99 points (2.80%) during the week and consequently YTD loss on the index widened further to 3.9%. Activity levels in the market improved during the week as Turnover increased 48% to Rs.3.0Bn. Activity levels during this week were mainly driven by the HNIs and Local institutional investors as crossings accounted for 44% of the week s Turnover. JKH accounted for ~50% of the crossings while Hemas & Lanka Walltiles accounted for 31% and 11% respectively. The activity helped push average turnover value to Rs.0.6Bn cf. Rs.0.5Bn last week. Foreign investors continued to withdraw funds from Sri Lankan equities during the week however, at a slower pace as net foreign outflows during this week amounted to Rs.161Mn cf. Rs.219Mn last week. Despite this week s foreign equity sell-off, foreign appetite for relatively undervalued Sri Lankan equities has remained positive thus far in Q2 18 with total net inflows in Q2 18 totaling to ~Rs1.5Bn (cf. outflow of Rs.2.6Bn in Q1 18). Markets in the week ahead are likely to look for cues from further economic and political developments. 1Q 18 GDP growth falls to 3.2% Y-o-Y. GDP growth in the 1st quarter of 2018 fell to 3.2% Y-o-Y (cf. 3.8% Y-o-Y in Q1 17 and 3.5% in 4Q 18) due to a slowdown in the growth of the Industrial Sector despite recovery of the Agricultural sector and marginal improvement of Service Sector during the period. Over this quarter, the Agricultural sector which declined consecutively over several quarters till 3Q 17 continued the growth momentum created in 4Q 17. Agricultural sector recorded the highest growth among all sectors (4.8% Y- o-y) as Growing of Rice recovered with a notable 56.6% Y-o-Y growth over the period (cf. 49.6% decline last year due to adverse weather conditions). Meanwhile 'Growing of Cereals', 'Growing of Vegetables', Growing of Tea recorded 40.2%, 22.3%, and 10.6% respectively. Service sector activities which account for ~57% of overall GDP meanwhile improved marginally from 4.3% Y-o-Y in 1Q 17 to 4.4% Y-o-Y in Q1 18. Growth in the sector was driven by the Financial service activities, Wholesale and retail trade, Telecommunication, Other personal service activities, and Real estate activities, including Ownership of dwelling. The second largest contributor, the Industrial sector, slowed down in 1Q 18 (0.9% Y-o-Y growth cf. 3.7% in 1Q 17) as Manufacture of coke and refined petroleum products contracted 38.8% Y-o-Y whilst the Construction sector (7.4% of GDP) declined 4.9% Y-o-Y. The CBSL projects GDP growth to recover in 2018 to 5.0% on the back of modest recovery in Agriculture sector and continued positive momentum in Services and Industrial sectors. Earlier in April 18, CBSL also eased policy rates by 25bps and held it unchanged in its 3rd Monetary Policy Review in May 18. 4

5 Exports /Imports (USD Mn) Total Arrivals T- Bill (6M ) Rate (%) Rs. Per kilo(unweighted) Rs /USD CCPI ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Economic Snapshot Weekly Market Review 14 June 2018 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Interest Rates Prime Lending Rate Ave. Wtd. Deposit Rates Ave. Wtd. Fixed Dep. Rates CCPI Inflation Y-o-Y % (Base 2013) Q 18 GDP Growth (Base 2010) 9.1% 3.4% 4.9% 4.8% 4.4% 3.1% 3.2% Source Central Bank Exchange Rate, Rs. vs. US$ Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Inflation (CCPI-N) YoY% May-15 Dec-15 Jul-16 Feb-17 Sep-17 Apr-18 6 Month T-Bill Yield Tea s Feb-15 Nov-15 Aug-16 May-17 Feb Jun-15 Mar-16 Dec-16 Sep-17 Jun-18 Source: Sri Lanka Tea Board Export & Trade Balance Trends in Tourist Arrivals Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Exports (LHS) Imports (LHS) Trade Balance (RHS) Trade Balance (USD Mn) 250, , , ,000 50,000 80% 64% 48% 32% 16% 0% 0-16% May-15 Feb-16 Nov-16 Aug-17 May-18 Source: Sri Lanka Tourism Development Authority Y-o-Y Growth 5

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