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.