8/3/2019 DNH Market Watch Daily 20.10

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Daily

20th October 2011Market Indices Market Performance

20.10.2011 19.10.2011 %Chg.ASPI 6,282 6,348 -1.0MPI 5,629 5,705 -1.3Turnover (mn) 689.6 687.0 0.4Foreign Purchases (mn) 110.9 24.9 345.2Foreign Sales (mn) 81.6 161.6 -49.5Traded Companies 232 268 -13.4Market PER (X) 16.2 16.3 -0.6Market Cap (LKR bn) 2,256 2,280 -1.0Market Cap (US$ bn) 20.3 20.5 -1.0Dividend Yield (%) 1.7 1.6 6.3Price to Book (X) 2.0 2.1 -4.8

Market Outlook Economies rank on the ease of doing business

Source-www.doingbusiness.org

Gainers /Losers (%)

Significant Trades (Turnover in LKR Mn)

Global Markets Interest Rates & CurrenciesIndex %Chg. . .20.10.2011

Sri Lanka - ASPI 6282 -1.04 Prime Lending Rate (Avg. Weighted) 9.4%

India - Sensex 16937 -0.87 Deposit Rate (Avg. Weighted) 6.5%Pakistan - KSE 100 11685 0.38 Treasury Bill Rate (360 Days) 7.3%Taiwan Weighted 7244 -1.48 Dollar Denominated Bond Rate 6.3%Singapore - Straits Times 2694 -0.96 LKR/US$ (Avg. Rate) 111.1Hong Kong - Hang Seng 17983 -1.78 LKR/EURO (Avg. Rate) 153.4

Disclaimer

DN

HMARKETW

ATCH

0

20

40

60

COMB REG JKH LLUB

17.5

16.9

13.6

6.6

-50.0

-37.5

-33.3

-31.6

Shalimar

People's Finance(W0020)

Hayleys MGT

Industrial Asphalts

Serendib Land

Kalamazoo

SMB Leasing (W0016)

J.L. Morison (X)

5,600

5,800

6,000

6,200

6,400

6,600

6,800

14/10/2011

17/10/2011

18/10/2011

19/10/2011

20/10/2011

ASI

MPI

DNH Financial (Pvt) Ltd.www.dnhfinancial.com

+94115700777

This Reviewis prepared andissued by DNHFinancial (Pvt.)Ltd.(DNH)based on information in thepublic domain, internally developedand othersources,believed to be

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EnvironmentalResourcesInvestment PLC (ERI).

The market continued in downward trajectory with theASPI shedding 1.0% while the MPI lost 1.3% to close thetrading session at 6282 and 5629 respectively. Turnoverremained muted at LKR690mn with Commercial

Bank, Regnis,and John Keells Holdings accounting for 17%of the days total. Losers outpaced gainers with SerendibLand, Kalamazoo and SMB Leasing (W0016) declining by50%, 38% and 33% offsetting gains in Shalimar, People'sFinance (W0020) and Hayleys MGT which advanced by18%, 17% and 14% respectively. Global markets meanwhiletraded largely lower ahead of the EU meeting on Sundaywhich investors hope may provide the necessary panacea tothe eurozones ongoingcrisis.

While market PEs have been on a declining trend, webelieve that the current multiple of 16X does not fully reflectthe valuations of a number of fundamentally strong stockswhich are trading at multiples of below 10X. With investorshaving pushed up the price of lower quali ty companiesduring the 2009/2010 bull run, an opportunity to invest incompanies of higher fundamental value now exists withsignificant upside potential of reversing relative

underperformance.With trading volumes showingincreasing signs of declining, we believe that the market iscoming close to consolidating before changing coursetowards a rerating. Consequently, with the majori ty of3Q2011 results yet to be released, we advise investors to takeadvantage of this window period to select stocks that arelikely to outperform based on solid intrinsic values.

http://www.doingbusiness.org/http://www.doingbusiness.org/