Current indications, if not in the real economy, at least in the Treasuries market, is that interest rates are on a downward trend.
In such a scenario it should give a boost to the stock market. However the contrary appeared to be happening, with the bourse recording its tenth lowest turnover figure for the year to date, with a sum of Rs. 254.1 million at Friday’s trading.
This follows the market making its second lowest turnover for the year to date with a figure of Rs. 193.48 million on Monday.
However, on Friday, boosted by gains made in Nestle’s share price, market indies made pyrrhic gains, with the benchmark ASPI increasing its value over its previous day’s close by 0.40% to 5,775.09 points and the newly introduced S&P SL 20 Index by 0.35% to 3,174.63 points on that Rs. 254.1 million.
The fortunes of market indices are intrinsically connected with the movement of the value of the bourse’s market capitalization.
Meanwhile, the reasons behind the “bear” run of the bourse are many, the most obvious and the most recent being poor performances of listed companies for the quarter ended September 30, 2013.
Meanwhile the lowest turnover the bourse has made for the year to date was Rs. 191.7 million which was on July 12. The second lowest: Rs. 193.48 million on Monday, November 25; third lowest: Rs. 197.44 million (November 11), fourth lowest: Rs. 201 million (June 24), fifth lowest: Rs. 220.9 million (November 5), sixth lowest: Rs. 228.2 million (July 10), seventh lowest: Rs. 234.3 million (November 15), eighth lowest: Rs. 239.3 million (September 6), ninth lowest: Rs. 241.9 million (July 11), tenth lowest: Rs. 254.1 million (November 29), eleventh lowest: Rs. 254.35 million (July 9) and twelfth lowest: Rs. 265.9 million (June 28).
At the beginning of the week on Monday, the ASPI declined by 0.29% to 5,775.67 points; while the S&P SL 20 Index fell by 0.47% to 3,182.94 points, whilst also registering a net foreign outflow (NFO) of Rs.11.98 million.
On Tuesday, it fell for the third consecutive day, with the ASPI declining by 0.48% to 5,748.01 points; while the S&P SL 20 Index fell by 0.45% to 3,168.59 points on a Rs. 464.7 million turnover, whilst registering a Rs. 49.4 million NFO.
Meanwhile, the bourse, making a dismal follow up to making its second lowest turnover for the year to date with a sum of Rs. 193.5 million at Monday’s (November 25) trading, fell for the fourth consecutive day on Wednesday, dogged by poor quarterly earnings for the quarter ended September 30, 2013; whilst also suffering a NFO for the third consecutive day, this time a sum of Rs. 46.37 million, though for the year to date having had enjoyed a Rs. 22.6 billion net foreign inflow (NFI).
The seeming lowering of interest rates, usually an attraction to the bourse, has however not taken off, vis-à-vis giving a boost to the stock market.
Adding to the bourse’s woes are the recent price hikes of essential commodities in the immediate aftermath of the previous week’s budget presentation by gazette notification, further denting retail consumer spending power, already buffeted by a 50% increase in electricity rates.
The ASPI fell by 0.06% to 5,744.67 points; while the newly introduced S&P SL 20 Index declined by 0.19% to 3,162.52 points on a Rs. 836.5 million turnover on Wednesday.
Meanwhile the lowest turnover the bourse has recorded for the year to date is a sum of Rs. 191.7 million on July 12, while the third lowest: Rs. 197.44 million on November 11.
However on Thursday, Ceylon Tobacco (CTC), the market’s second largest capitalized stock, helped stop
the market’s four day losing streak, when its share price made gains.
As a result, the ASPI increased its value by a marginal 0.13% to 5,752.20 points over its previous day’s close, while the newly introduced S&P SL 20 Index gained by 0.03% to 3,163.59 points on a Rs. 718.9 million turnover.
CTC’s share price gained by 2.63% to Rs. 1,057.10 a share.
When market capitalization increases, the value of the ASPI in particular increases.
Nevertheless the bourse suffered an NFO for the fourth consecutive day, with an NFO figure of Rs. 6.74 million at Thursday’s trading, however, in the year to date, the bourse has had experienced a NFI of Rs. 22.6 billion. Thursday’s turnover was boosted by foreign to foreign transfers on Aitken Spence and local to local transfers on E Channelling which contributed to nearly 50% of the day’s turnover.
On Friday the market made a Rs. 36.3 million NFI.