The Bourse Weekly Performance (Week-ended 3rd January 2014)

The Bourse Weekly Performance (Week-ended 3^rd January 2014)

	Week-ended 27th December 2013	Week-ended 3rd January 2014
All Share Price Index	5,876.66	5,973.80
S&P SL20 Index	3,240.63	3,294.82
Total Turnover for the week (Rs.)	1,962,115,721/-	2,374,254,696/-
Total Net Foreign Inflow / (Outflow) (Rs.)	251,080,175/-	(2,765,564/-)
Market Capitalisation (Rs.)	2,444,870,917,079/-	2,485,284,831,934/-
Market PER	15.27	16.08

2013 was a disappointment for equity investors at the Colombo bourse as the ASPI rose only 4.78% year-to-date. The Index was seen to have underperformed against major developed and emerging markets this year, even though it managed to close in the green for the year, unlike in 2012. Despite the marginal increase in the index, bluechip stocks in the food and beverages, healthcare and banking sectors, have reported double digit gains during the year 2013 supported by foreign buying. Reports indicated that “Notwithstanding eurozone debt tensions, most global equity markets rose during the year with foreign funds flowing into both developed and emerging market equities. Foreigners continued their buying spree with net inflows of Rs. 22.8 Billion in 2013, indicating their confidence in Sri Lankan equities”. However, the Bourse rose to a strong start for a fifth straight session to an 11-week high on Thursday as investors bought banking shares. This was after the Central Bank cut the reverse repo (now known as standing lending facility) rate by 50 basis points to a multi-year low.

Though the start of 2014 seems promising for the Colombo bourse, U.S. stocks fell on their first day of trading in 2014. Reports indicated that this was because investors booked profits in the wake of the S&P 500's best yearly advance since 1997, with many of last year's strongest performers down on the day. Reuter’s also reported that “European shares were fighting to hold their ground on Friday after a turbulent day for Asian markets that saw a sudden reversal in some very popular, and thus crowded, trades. The result was a pullback in the euro, sterling, and Asian stocks and a bounce for the yen, gold and bonds. Oil prices also took a spill, though for largely separate reasons”. The S&P closed 2013 with a 29.6 percent gain for the year, its best annual performance since 1997. The Dow surged 26.5 percent in its best year since 1995. The Nasdaq jumped 38.3 percent, its best year since 2009.

Given below is a look at year to date figures at the Colombo bourse for 2012 and 2013;

	2013	2012
Year end ASPI	5,912.78	5,643.00
Year to Date gain/ (loss) in ASPI	4.78%	(7.10%)
Year end S&P	3,263.87	3,085.33
Year end Market Capitalisation	Rs. 2,459 Billion	Rs. 2,167 Billion
Net Foreign Inflow for the year	Rs. 22.8 Billion	Rs. 39.2 Billion
Year end PER	15.92	15.93

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.