MARKET

Indices close in red

Markets continued last week’s downward momentum with all three indices closing in the red this week.

The ASPI lost 1.03% (55.86 points) over the week to close at 5351.25 points. The more liquid MPI meanwhile dropped 86.38 points (or 1.74%) to close at 4868.83 points, while the S&P SL 20 index lost 0.85% (or 25.29 points) to close the week at 2942.02 points. JKH contributed 40.65% to the week’s total market turnover value, making the stock the highest contributor to this week’s turnover. The counter contributed LKR 844.54mn while Aitken Spence accounted for 7.61% or LKR 158.13mn of total market turnover value. Nestle, which contributed LKR 89.93mn (or 4.33%) was the third highest contributor to total market turnover over the week.

Total market turnover value for the week amounted to LKR 2.08bn, a drop of 70.29% relative to last week’s value of LKR 6.99bn.

The daily average turnover value for the week amounted to LKR 519.41mn a 62.86% decline from last week’s daily average of 1.40bn.

Market Capitalization too decreased 1.01% (or LKR 21.03bn) to LKR 2054.91bn from last week’s value of LKR 2075.94bn.

The Diversified sector was the highest contributor to this week’s turnover value, accounting for 51.63% or LKR 1.07bn of market turnover value. The Banking and Finance sector made a contribution of LKR 392.67mn (or 18.90%) to the market’s total turnover value while the Beverage and Tobacco sector accounted for 12.99% (or LKR 269.93mn).

The Diversified sector dominated the weekly turnover volume too, accounting for 26.19% of total turnover volume as 16.77mn shares changed hands over the week.

The Banking and Finance sector contributed 23.93% or 15.32mn shares, while 6.91mn shares (10.79%) changed hands in the Manufacturing sector.

The price gainers list was led by Property Development, which gained 20.55% to close at LKR 52.80 relative to last week’s closing price of LKR 43.80. Abans Finance gained 20.49% to close the week at LKR 39.40 while Dunamis Capital closed at LKR 12.50, gaining 16.82% over the week. Equity One and Ceylinco Insurance [NV] were also amongst the top price gainers gaining 16.56% and 11.23%, respectively.

The top price loser for the week was EB Creasy and Company, declining 18.67% (W-o-W) to close the week at LKR 980.00, relative to last week’s close of LKR 1205.00.

Mercantile Shipping Company declined 17.65% (W-o-W) to close at LKR 140.00 while Tangerine Beach Hotels closed down 15.13% at LKR 66.20.

Foreign investors closed the week in a net buying position of LKR 0.92bn relative to a net selling position of LKR 1.10bn recorded last week, as average daily net inflows amounted to LKR 0.23bn compared to last week’s daily average net outflow of LKR 0.22bn.

Average daily foreign purchases however declined 38.16% (W-o-W) to LKR 306.45mn (relative to last week’s average of LKR 495.51mn) while average daily foreign sales declined 89.16% (W-o-W) to LKR 77.57mn (from last week’s average of LKR 715.73mn).

In terms of volume, JKH and Touchwood led foreign purchases, while foreign sales were led by Tokyo Cement and Browns Investments. In terms of value meanwhile, JKH and Nestle led foreign purchases, while Tokyo Cement and National Development Bank led foreign sales.

Point of view

Depressed retail sentiment weighed down markets yet again this week with the main ASPI hovering just above the 5350 mark.

ASPI gains on Thursday (+28.9 points) failed to offset the rest of the week’s cumulative decline of 84.8 points while average daily volume for the week touched LKR0.5bn, 44% below the Y-T-D daily average of LKR0.9bn. Foreign inflows to the bourse however remained buoyant, hitting an all-time* Y-T-D high of LKR 34.55bn amid solid buying interest in blue-chip counters.

We expect similar subdued retail sentiment to predominate the week ahead.

After 3 consecutive months of declines, inflation in November rose to 9.5% Y-o-Y relative to 8.9% Y-o-Y in October and 9.1% Y-o-Y in September.

Core inflation which excludes Fresh Food, Energy, Transport, Rice and Coconut meanwhile continued its uptrend since September, hitting 7.2% Y-o-Y in November relative to 6.8% in October. Rates - which showed some indication of declining during the early part of October - have continued to be on the uptrend through November, gaining 12 bps over the month to 12.09% (versus 11.97% in early November).

The LKR meanwhile weakened marginally (0.02%) against the USD this week, closing at an average of 130.26 relative to an average of 130.22 last week.

Canada growth slows to 0.6 percent in Q3

Canada's economy slowed to an annual pace of0.6 percent in the third quarter as business investment and exports declined, a government agency said Friday.

Growth in gross domestic product (GDP) hit the brakes, falling from the 1.7 percent maintained during the first two quarters of the year and short of analysts' forecast of 0.9 percent.

“Canada got a lot of accolades by leading the pack out of recession, but there's little reason for back-patting in the evident slowdown taking hold this year,” said analysts Avery Shenfeld and Emanuella Enenajor of CIBC World Markets.

Canadian growth over the past year has dropped behind the United States by a full percentage point, they noted.

AFP