The Bourse Weekly Performance (Week-ended 29th November 2013)

The Bourse Weekly Performance (Week-ended 29^th November 2013)

	Week-ended 22nd November 2013	Week-ended 29th November 2013
All Share Price Index	5,792.72	5,775.09
S&P SL20 Index	3,197.88	3,174.63
Total Turnover for the week (Rs.)	3,280,971,022/-	2,467,599,253/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	63,073,943/-	(78,164,263/-)
Market Capitalisation (Rs.)	2,409,773,624,325/-	2,402,708,281,659/-
Market PER	15.02	14.98

The international stock exchanges are seen to be trading near six year highs, which Reuter’s reported was due to “faith in an improving global economy and support from central banks, which drove markets towards a third straight month of gains.” This was mainly due to the fall in euro zone unemployment numbers for the first time in almost four years coupled with rising prices based on latest inflation data which gave fresh momentum to a global economic recovery. The report went on to explain that “The Nikkei in Tokyo notched up its best November since 2005 despite some late profit taking in Asia, as the yen, at a five-year against the euro and a six-month low versus the dollar, boosted hopes for its big exporting firms.” European shares opened fractionally higher near a 5-1/2 year high, heading for a seventh week in positive territory out of the last eight. The Financial Times Global Macro Maps indicated that, the highest growth over the past 5 days have been reported in India’s S&P CNX Nifty of 3.04%, followed by Spain (Ibex 35) and Mexico (MXSE IPC). However, Russia (RTS) and Indonesia (Jakarta Comp) failed to meet the momentum as these market indices reported losses above 1% for the past 5 market days.

Colombo too failed to meet the exceptional performance of the world markets, while the 2014 budget too failed to revitalize a struggling market. A recent market report suggested that “the market has been on a falling trend after earnings in the September quarter pointed to a slower growth. Worries on the possibility of new taxes imposed on consumer spending and thereby undermining the revenue of listed firms has also hurt the market”. The report went on to indicate that as of mid week, the Colombo bourse has lost Rs. 20 Billion in value post-2014 Budget week. However, the latter part of the week saw the bourse attempting to make a slow recovery even though the ASI closed for the week in the red losing 17 points. This was equivalent to a loss in market capitalization of Rs. 7 Billion post the budget week.

Turnover levels continued to drop this week too and a significant contribution came in from the Banking Finance and Insurance sector followed by the Diversified Holdings sector. HNB, COMM, JKH & SPEN contributed for the turnover for the week. The biggest loss for the week was generated in the Trading sector while the Power and Energy sector generated the highest return for the week.  Analysts point out that the widespread bearish sentiments at the bourse may be linked to “the Budget not being emphatic in terms of kick-starting a fresh wave of optimism and growth” while some made relation to the corporate debt market offering attractive fixed income returns through debenture issues. Reports suggest that these resulted in diversion of investor interests and liquidity from equities. Nevertheless, as the market enters the final month of trading for 2013, foreigners make net buyers for the year while retailers are seen to be taking to the side-lines. The market PER of 14.98X is 6% lower than the opening market PER for 2013. So far this year the Colombo bourse has reported a year to date gain of 2.34%.

The Bourse Weekly Performance (Week-ended 22nd November 2013)

The Bourse Weekly Performance (Week-ended 22^nd November 2013)

	Week-ended 15th November 2013	Week-ended 22nd November 2013
All Share Price Index	5,810.97	5,792.72
S&P SL20 Index	3,174.68	3,197.88
Total Turnover for the week (Rs.)	2,247,705,236/-	3,280,971,022/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	(88,218,275/-)	63,073,943/-
Market Capitalisation (Rs.)	2,417,364,056,273/-	2,409,773,624,325/-
Market PER	15.22	15.02

The International markets saw a positive climb towards the latter part of the week. The data released by the US Federal Reserve indicated that, though a tapering of the stimulus is likely during the first half of 2014, it is unlikely to create a rise in interest rates immediately. Reuter’s reports expressed “Volatility has eased as investors realize that scaling back the Fed's bond-buying program, which will probably begin in the first quarter of next year, does not necessarily mean rates will rise soon afterwards. Solid U.S. data has eased concern that weaker growth in China and the euro zone may set back the fragile global economic recovery. The data helped to bolster the optimistic tone, especially on world equity markets”. The report went on to indicate the Dow Jones Industrial Index surpassed the psychological threshold of 16,000 for the first time ever while MSCI's world equity index was up 0.2 percent.

While anticipation of these changes seem to positively drive the world markets, the Colombo bourse continued to be bearish even after the announcement of the 2014 Budget. The key announcements in the budget suggested that the government plans to achieve a real GDP growth of 7.0% in 2013, budget deficit is targeted at 5.2% of GDP in 2014, 4.5% in 2015 and 3.8% in 2016, Inflation to be at 6.0% in 2014. Total revenues for 2014 are forecasted at LKR1.47 trillion while total expenditures are to be LKR1.99 trillion. Many analysts indicated that these proposals would likely create mixed effects on sectors such as Banking Finance and Insurance, Diversified Holdings, Power and Energy, Construction and Engineering, Manufacturing and Motors.

The Colombo bourse lost 18 points this week in the ASI even though anticipation of the budget saw a slight rise in the index mid week. The loss for the week is equal to Rs. 7.59 Billion in Market Cap. Turnover levels picked up after the dull trading experienced during the CHOGM week. However, the average daily turnover levels continue to drop and the week saw an average weekly turnover of Rs. 656 Million. The Banking Finance and Insurance sector reported the highest turnover this week equivalent to 64% of the weekly turnover. Analysts point out that retail investors continue to be on the side lines while some investors are making selective investment decisions on fundamentally strong shares. The Colombo bourse currently generates year to date returns of 2%. In consideration of seasonality effects, it is unlikely that the approaching December month would generate much greater returns. However, the market continues to await in anticipation.

The Bourse Weekly Performance (Week-ended 8th November 2013)

The Bourse Weekly Performance (Week-ended 8^th November 2013)

	Week-ended 1st November 2013	Week-ended 8th November 2013
All Share Price Index	5,954.36	5,855.34
S&P SL20 Index	3,280.33	3,232.50
Total Turnover for the week (Rs.)	3,568,955,119/-	3,538,187,057/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	445,407,550/-	(571,990,652/-)
Market Capitalisation (Rs.)	2,476,186,211,350/-	2,435,043,796,783/-
Market PER	15.75	15.50

The week saw most global markets weaker in terms of their weekly performance while majority of the losses were reported towards the latter part of the week. Reuter’s reported that “Investors in U.S. stocks shrugged off the European Central Bank's move to cut interest rates after a slump in inflation sparked fears the euro zone's economic recovery could stall. The move reinforced expectations global central banks will continue to buoy struggling economies”. In Asian markets, Japan’s Nikkei rose to a 10 month high on Thursday, which analysts believe is because the Bank of Japan starts a two-day meeting on Wednesday under intense political pressure to expand its asset-buying programme aggressively to snap the world's third-biggest economy out of its fourth recession since 2000. Meanwhile, Hong Kong shares hit two-week trough ahead of China party plenum. The Financial Times Global Macro Maps indicated that all global markets showed a week to date negative performance while Indonesia’s Jakarta Comp made the highest positive weekly performance.

The Colombo bourse showed bearish sentiments through-out this week, with the ASI reaching over 1 month-low values and the weekly turnover values being at a near 4 month low levels. The ASI lost a total of 99 points this week equivalent to a loss of Rs. 41Billion in market capitalization. The central bank cut its policy rates to multi-year low last month. Despite this move and a declining trend in interest rates analysts explained that this move has failed to surge market sentiments. Brokers explained that the losses this week were led by blue chips in low trading volume as concerns over poor earnings dented investor sentiment along with the absence of retail investors. Further, Foreigner’s were seen to be net sellers this week.

So far this year, the Colombo bourse has only made year to date gains of 3%. The ASI has grown 212 points equivalent to Rs. 267Billion in market capitalization.