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.

The Bourse Weekly Performance (Week-ended 25th October 2013)

The Bourse Weekly Performance (Week-ended 25^th October 2013)

	Week-ended 17th October 2013	Week-ended 25th October 2013
All Share Price Index	5,976.51	5,948.75
S&P SL20 Index	3,309.00	3,280.48
Total Turnover for the week (Rs.)	3,288,417,974/-	4,508,373,529/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	680,104,604/-	674,658,149/-
Market Capitalisation (Rs.)	2,485,299,367,300/-	2,473,757,468,353/-
Market PER	15.94	15.97

The early part of this week saw the Colombo bourse dipping as investors were cashing to buy JKH rights. Market witnessed stocks slipping for three straight session till Wednesday to a two-week low, led by telecommunications and hotel shares as investors sold their stocks to fund buying in top conglomerate John Keells Holdings PLC Rights Issue. The bourse snapped back on Thursday, ending its three-day losing streak and closed positive, led mainly by gains in John Keells Holdings along with its Rights. The latter part of the week saw the benchmark ASI showing an upward trend backed by gains in John Keells Holdings, Finlays Colombo, Sri Lanka Telecom, Ceylinco Insurance and National Development Bank, even though the weekly performance of both the ASI and the S&P were still in the red.

In international markets, while shares in the West were seen to be rising with notable gains over the past 5 days, the Asia-Pacific shares were seen to be making negative returns. Reuter’s reports suggest that, most US shares were up “as economic data underscored views U.S. monetary stimulus will be in place for the foreseeable future and as earnings offered some upbeat news”. The report continued to point out that “Expectations the Fed will continue its stimulus have helped stocks all year, with the S&P 500 index up 22.8 percent so far for 2013”. On Friday, Bloomberg reported, the negative impact of this on the emerging markets where, “The MSCI Emerging Markets Index fell for a second day, losing 0.3 percent. The Shanghai Composite Index dropped 0.9 percent and the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slid 1.3 percent”.

Recent market reports on the Colombo bourse suggested that “given the fact that most investors would now agree that the potential for short term trading opportunities are markedly limited, selecting medium to longer term investments would depend on a number of parameters, most importantly the strength of the top line and its sustainability”. So far this year foreigners have been net buyers with a year to date inflow of Rs. 22.8 Billion. At a trailing PER of 15.9X the Colombo bourses currently includes fundamentally strong shares with a proven track record at much attractive prices.

The Bourse Weekly Performance (Week-ended 17th October 2013)

The Bourse Weekly Performance (Week-ended 17^th October 2013)

	Week-ended 11th October 2013	Week-ended 17th October 2013
All Share Price Index	5,947.42	5,976.51
S&P SL20 Index	3,283.62	3,309.00
Total Turnover for the week (Rs.)	3,292,715,617/-	3,288,417,974/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	999,770,082/-	680,104,604/-
Market Capitalisation (Rs.)	2,473,178,955,776/-	2,485,299,367,300/-
Market PER	15.88	15.94

In global markets the Dow-Jones rose over 200 points on Wednesday which Bloomberg explained was because “disruptions from the U.S. debt-ceiling debate prompted speculation the Federal Reserve will maintain stimulus”. This was after “President Barack Obama signed into law a measure ending the 16-day government shutdown and extending the nation’s borrowing authority until early next year”. Most global markets were seen to be reacting positively to these latest developments while Chinese markets Hang Seng and FTSE Xinhua recorded negative returns.

The Holiday shortened week at the Colombo bourse saw the ASI and S&P indices rising backed by a surprising rate cut at this month’s monetary policy meeting of CBSL. The market gained a total of 29 points this week in ASI and 25 points in S&P. This is equal to Rs. 12Billion rise in market capitalization. This week’s market trades were mostly dominated by local investors who were keenly trading on JKH and JKH Rights. Foreigners brought in a net inflow of Rs. 680Million increasing the year to date figure to Rs. 22Billion. Diversified holdings contributed to 77% of the weekly turnover backed by the JKH counter. The biggest loss was recorded in the Footwear and Textile sector while the Services sector made the biggest gain.

The 50 bps rate cut created quite a buzz in the market and generated over Rs. 2Billion in turnover on Tuesday, 15^th October. Analyzing the recent rate cut by the CBSL a weekly market report suggested that “Going forward this may reduce the market interest rates gradually, which may draw back the investors to the stock market. Currently CSE is trading at a PE of 12.0x, which is 2.4% discount to the MSCI frontier market index PE and 20% discount to the MSCI frontier emerging market index PE”.

The Bourse Weekly Performance (Week-ended 11th October 2013)

The Bourse Weekly Performance (Week-ended 11^th October 2013)

	Week-ended 04th October 2013	Week-ended 11th October 2013
All Share Price Index	5,837.95	5,947.42
S&P SL20 Index	3,231.79	3,283.62
Total Turnover for the week (Rs.)	4,809,349,498/-	3,292,715,617/-
Total Net Foreign Inflow/ (Outflow) (Rs.)	652,649,502/-	999,770,082/-
Market Capitalisation (Rs.)	2,427,654,761,490/-	2,473,178,955,776/-
Market PER	15.59	15.88

As the US Government shut-down passes its 11^th day, a ray of hope was seen when the US officials were conducting meetings to consider raising the US debt ceiling, a question that is seen to be a key concern in the global markets. On Friday, Bloomberg reported that, “As word of possible progress emerged, Asian stock indexes from Japan to Australia rallied more than 1 percent today, fueling a 1.3 percent jump in the MSCI Asia Pacific Index of regional equities”. However, in another report they also commented that the second-biggest gain of the year for the Standard & Poor’s 500 Index (SPX) failed to trigger the same impact in US Stocks. Reuters’ reported that the move by the US President to hold discussions with his Republican counterparts is after the warnings by G20 nations that failure to meet the US debt obligations “could spark a financial crisis and tip the world's largest economy into recession with damaging repercussions that would be felt worldwide”. The report also goes on to state that “officials from around the world had expressed confidence the United States would break through the political logjam that had already led to a partial shutdown of the U.S. government”. The Financial Times Global Macro-maps indicated that the performance of almost all Asian Shares in the past 5 days have been in the green.

Recent reports on the Colombo bourse saw Analysts suggesting that “With a year-to-date gain of 3% in dollar terms and a Price Earnings Ratio of 12 times, the valuation of Sri Lanka’s stock market remains attractive in comparison to its peers”. The report went on to state that “the, divergence between global equity markets and Sri Lanka’s Bourse during the month has been stark, with both developed and emerging markets rising significantly while the Sri Lankan Bourse experienced only mediocre growth”. This week saw yet another change in the Directorate of Touchwood adding to the already existing concerns on the company. The week also saw several key crossings in counters such as JKH, CTC, Commercial Bank, HNB and Access Engineering. Foreigners have been playing a key role at the Colombo bourse this week too with the year to date net foreign inflow rising to Rs. 21.46Billion. Of the total turnover a significant portion came in on Friday through crossings. However, the turnover was seen to be 32% less than the previous week. The overall market gained 109 points this week in ASPI equivalent to Rs. 45Billion in market cap. The S&P index gained 51 points this week. The Colombo bourse currently generates a year to date return of 5.3% in ASPI.