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