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.

The Bourse Weekly Performance (Week-ended 1st November 2013)

The Bourse Weekly Performance (Week-ended 1^st November 2013)

	Week-ended 25th October 2013	Week-ended 1st November 2013
All Share Price Index	5,948.75	5,954.36
S&P SL20 Index	3,280.48	3,280.33
Total Turnover for the week (Rs.)	4,508,373,529/-	3,568,955,119/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	674,658,149/-	445,407,550/-
Market Capitalisation (Rs.)	2,473,757,468,353/-	2,476,186,211,350/-
Market PER	15.97	15.75

The Colombo Bourse opened this week on a negative note with foreigner’s recording significant outflows on Monday and Tuesday. However, the ASI picked up momentum gradually during the course of the week before closing for the week nearly flat from the previous week. Meanwhile, The Financial Times Global Macro map indicated mix sentiments across global markets, with most emerging markets recording gains over the past 5 days. However, Indonesian stock exchange Jakarta Comp indicated a drop of 3.24% for the week.

Reuter’s reported that growing concern’s were seen in the western markets as “the euro fell to a two-week low against the dollar on Friday, extending losses into a fifth straight session as slowing euro zone inflation bolstered expectations of looser monetary policy from the European Central Bank”. The report continued to state that “In contrast to the euro zone, U.S. data was far more encouraging” as a recent survey suggested that “data kept alive speculation the Federal Reserve may scale back stimulus at its December meeting, though many still tip March as the likeliest window for a move”. Reuter’s also reported that “European shares gave up early gains to turn lower on Friday, led by Royal Bank of Scotland after it said it would create an internal "bad bank" to manage the run-down of its riskiest assets. The stock fell 3.8 percent to lead fallers in both the FTSE 100 and pan-European FTSEurofirst 300 in heavy volume”.

At the Colombo bourse, JKH, which has been raising $ 299 Million through a Rights Issue coupled with warrants, said its Rights Issue was substantially oversubscribed by the 25^th October. The losses during the early part of the week were because of thin-trade in large caps and continued foreign outflow. Further stockbrokers were quoted that the market would see sustained gains only after retail investor’s return. With the active participation of foreign and local investors the bourse turned positive on Wednesday. A recent market report indicated that “With several of the stocks currently trading on attractive valuations, little excuse is seen for bottom-up investors to enter the market and advise them to however restrict their exposure to quality positions. The window to invest is now open for those willing to choose an alpha driven approach. In this respect, stock selectivity will determine the winners from the losers”. The Colombo bourse currently makes a year to date gain of 5.52% in ASI, while the net foreign inflow for the year so far is Rs. 23.26 Billion.