The Bourse Weekly Performance (Week-ended 27th December 2013)

The Bourse Weekly Performance (Week-ended 27^th December 2013)

	Week-ended 20th December 2013	Week-ended 27th December 2013
All Share Price Index	5,857.36	5,876.66
S&P SL20 Index	3,228.17	3,240.63
Total Turnover for the week (Rs.)	3,491,745,047/-	1,962,115,721/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	(871,978,771/-)	251,080,175/-
Market Capitalisation (Rs.)	2,436,841,569,894/-	2,444,870,917,079/-
Market PER	14.99	15.27

This Christmas week saw European stocks rising early on Friday as renewed appetite for risk fuelled a year-end equity rally. Having fallen prey to this renewed appetite for risk which lifted Wall Street to record highs and weighed on the low yielding currency, the yen wallowed at five-year troughs against the dollar and euro. U.S. stocks rose on Thursday, with the Dow and S&P 500 ending at record highs as retail shares rallied following strong data about the holiday shopping season. The Financial Times Global Macro Maps indicated that all international markets have been in the green over the past 5 market days, except Chilean Stock Exchange. Reuter’s reported “Most equity markets continued to gain ground, with the FTSEurofirst 300. The German blue-chip index hit a record high and was on track to post an annual gain of around 25 percent. In the US Market Retail stocks stayed in the spotlight as the holiday shopping season drew to a close.

The Holiday blues continued in the early part of the week at the Colombo bourse, before edging up on Thursday, snapping three straight sessions of falls. However, the Turnover on Thursday, slumped to a one-year low and share volume fell to its lowest in four years as most investors stayed away from the market. Bouncing back from the lowest turnover figures, the market generated a turnover of over Rs. 1.3 Billion on Friday. Reports suggest that “Analysts expect the market to rally early in the New Year as the possibility of retail investors returning to risky assets is increasing due to falling interest rates, with yields on treasury bills dropping to their lowest since November 2011 at last week’s auction”.

With two more market days for the year to end given below is a look at year to date figures at the Colombo bourse;

	2013	2012
Year end ASPI	5,876.66	5,643.00
Year to Date gain in ASPI	4.14%	-7.10%
Year end S&P	3,240.63	3,085.33
Year end Market Capitalisation	Rs. 2.444 Billion	Rs. 2,167 Billion
Net Foreign Inflow for the year	Rs. 22.5 Billion	Rs. 39.2 Billion
Year end PER	15.27	15.93

The Bourse Weekly Performance (Week-ended 20th December 2013)

The Bourse Weekly Performance (Week-ended 20^th December 2013)

	Week-ended 13th December 2013	Week-ended 20th December 2013
All Share Price Index	5,795.66	5,857.36
S&P SL20 Index	3,185.67	3,228.17
Total Turnover for the week (Rs.)	1,600,299,229/-	3,491,745,047/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	231,414,379/-	(871,978,771/-)
Market Capitalisation (Rs.)	2,411,231,812,453/-	2,436,841,569,894/-
Market PER	14.83	14.99

This week saw the Dow Jones and S&P 500 indices reaching all time high levels after the Federal Reserve officially announced that it would commence tapering of the stimulus. Reuter’s reports indicated that “Fed's move came as a surprise to many in the market. It confirmed that the U.S. economy was on firmer footing and put to rest the question of when the Fed would begin to scale back its bond-buying program”. The immediate reaction saw the stocks continuing losses prior to a drastic turnaround and reaching its current figures. Thursday, saw the Dow Jones closing at a record high on a second straight session even though the other stocks were seen to be closing nearly flat from Wednesday’s close. The move by the Fed saw Asian shares growing higher as investors reassessed the Federal Reserve's policy outlook. Friday however, saw Chinese stocks stumbling following fear of a cash crunch in the Chinese economy. This move by the Fed saw other markets too reacting with the US Dollar reaching five year highs against the Yen. Gold which was at its six month low levels was also seen to be rebounding.

In the domestic market the drop in all Treasury Bill yields to a two year low was seen to be accepted positively by investors as the Colombo bourse reached its six week high figures on Thursday. This was following a drastic drop in interest rates at the weekly Treasury Bill auction where, yields in 91-day, 182-day and 364-day Treasury Bills dropped 12 bps, 29 bps and 62 bps respectively. Earlier in the week reports also suggested that “Analysts anticipate the market could witness a rally in the near future as the possibility of retail investors returning to risky assets is increasing due to falling interest rates”. However, it is uncertain if the rally on Thursday, where the ASPI gained 55 points, is the only such session as the market closed in the red on Friday. Further, seasonality suggests that the approaching Christmas holidays are likely to dull activity.

Reports also pointed out that JKH was the key contributor for the weekly turnover and the bourse performance after the Government approved a mixed-development project of the market heavyweight. This week the ASI gained 61 points in total while the year to date gain is only 214 points. The high turnover generated by JKH contributed to the considerable growth in turnover compared the previous week even though foreigners were seen to be net sellers of over Rs. 800 Mn bringing the year to date net foreign inflow to Rs. 22.2 Bn.

The Bourse Weekly Performance (Week-ended 13th December 2013)

The Bourse Weekly Performance (Week-ended 13^th December 2013)

	Week-ended 6th December 2013	Week-ended 13th December 2013
All Share Price Index	5,810.24	5,795.66
S&P SL20 Index	3,183.09	3,185.67
Total Turnover for the week (Rs.)	4,691,747,416/-	1,600,299,229/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	335,918,500/-	231,414,379/-
Market Capitalisation (Rs.)	2,417,342,265,262/-	2,411,231,812,453/-
Market PER	15.00	14.83

Reuter’s reported that International markets were depressed in the recent once again due to rising concerns on the tapering of US Fed Stimulus. The report explained that “Global equities headed for their biggest two-week drop since June and the dollar hit 5-year highs against the yen on Friday amid concern the U.S. Federal Reserve could start scaling back its stimulus as early as next week”. The MSCI world equity index is said to have lost 2.5% in the past two weeks, which is the biggest fortnightly loss since June. The Federal Reserve policy meetings are to be held next week. Though the decision on the tapering is not expected to take place till January 2014, Investors believe it is likely to be a “close call”. Financial Times Market Macromap indicated mixed sentiments in the international markets, with most European shares still continuing in the green.

Sentiments at the Colombo bourse remained lackluster with the main index losing significantly mid week, prior to making reasonable gains over the latter part of the week.  Stockbrokers indicated that these losses were mainly due to the note worthy losses reported in some key blue chip counters such as Nestle and Ceylon Tobacco. Foreign buying into United Motors Lanka Plc (UML) during the week also resulted in the year-to-date net inflows reaching the Rs. 23 billion mark level, which was last seen a month ago. However, with seasonality setting in, turnover levels saw the lowest for 2013 as most investors took to the side lines.

The ASI made an overall loss of 14 points (-2.5%) while the S&P gained merely 2 points for the week. So far this year the Colombo bourse records year to date gains of 2.71% and 3.25% in the ASI & S&P indices respectively.