Weekly Market Recap

09 September 2015

Local market - Week in review

Level
7,215.11
3,957.83
3,065.35

Index Returns (%)/Market Cap growth (%)

1 Week
YTD
1 Year 2 Yr. Cum
(1.84)
(1.15)
2.19
25.59
(2.26)
(3.21)
1.41
23.26
(1.84)
(1.27)
3.43
29.55

Levels (%)
04/09/2015 28/08/2015 31/12/2014 04/09/2014 04/09/2013
6.79
6.53
5.74 not offered
8.61
7.07
6.87
5.84
6.28
9.64
7.17
6.97
6.00
6.30
10.56

The 91 day Bill led the sprint, reflecting an increase of 26 basis points (bps) to
6.79% whilst the 182 day and 364 day bills both increased by 20 bps each to 7.07%
and 7.17% respectively. The total accepted amount dipped to a 17-month low of CSE Equity Market Performance One year
LKR 3.9 Bn against a total offered amount of LKR 12.0 Bn.
In the primary T-bond auctions on 31st August, the yields continued their upward
trend. A total amount of LKR 31.318 Bn was offered for all three maturities. More
than 75% of the proceeds were accepted on the 01-06-2026 at a w. avg. yield of
10.34%. Meanwhile, the 01-05-2020 was accepted at a 9.35% w. avg. yield and
the maturity of 01-08-2021 was accepted at a 9.71% w. avg. yield. However, the
Monetary Board of CBSL kept the monetary policy rates unchanged in August
2015.
LKR fell over 3% to trade a record low of LKR 137.50 - 138.00 per USD on Friday
after the Central Bank of Sri Lanka (CBSL) effectively floated the currency by
ceasing to quote its own reference rate.
Other Highlights
CBSL Governor confirmed that Sri Lanka will receive the balance USD 1.1 Bn
from the Reserve Bank of India (RBI) to boost foreign reserves under the USD
1.5 Bn swap arrangement. According to CBSL, the realisation of the remaining CSE All Share Sector Returns
proceeds of the currency swap and long term financial flows to the government,
including the planned term loan of USD 500 Mn will support official reserves
and it is expected to stabilize the exchange rate in line with sound
macroeconomic fundamentals.
in June 2015 compared to 17.6% in May 2015. The expansion in private sector
credit in the first half of the year was largely due to higher disbursements of
credit to the industry and services sectors. However, the rapid increase in the
imports of consumer durables including motor vehicles driven by credit
available at low interest rates, among other things, has raised some concerns.

Headline inflation remained in the negative territory for the second consecutive
month, recording (0.2)% YoY in August 2015. Core inflation, which reflects the
underlying inflation in the economy, increased to 3.9% YoY from 3.5% YoY in
August 2015.
(Source: Daily FT/LBO)

Website: www.ndbs.lk

Weekly Data Centre

SL Equities
The weekly average market turnover hit a 21 week low with ASPI and S&P SL20 ASPI
recording weekly losses of 1.84% and 2.26% respectively. The footwear and S&P SL20
textiles sector recorded the highest return for the week of 3.70% whilst the oil
Market Capitalisation (LKR Bn)
palms sector was the second highest, increasing by 0.09%. Meanwhile, the largest
price gain was witnessed in Kalamazoo Systems whilst John Keells Holdings
Warrant 22 recorded the largest price loss. Foreigners remained active and closed
SL Gov Sec Key Rates
as net sellers for the week.
91 Days
The weighted average (w. avg.) yields at T-Bill auction were seen increasing for
the 10th consecutive week to six month highs, with 182 day T-Bill and 364 day T- 182 Days
Bill breaking the 7.00% physiological barriers for the first time since 11 th March. 364 Days

Credit extended to the private sector by commercial banks accelerated to 19.4%

Tel: 0112131000

Currencies
LKR per $
LKR per
LKR Per

04/09/2015
137.75
153.46
1.16

31/12/2014
131.20
158.73
1.10

04/09/2014
130.22
168.53
1.24

Corporate Debt
Urban Development Autority
National Development Bank
Bank of Ceylon
Bank of Ceylon
Commercial Leasing & Finance

Maturity
05/05/2014
29/11/2017
21/09/2019
24/11/2019
21/07/2020

Coupon (%)
11.00
9.40
16.00
8.00
9.75

Spot (LKR)
100.51
100.00
100.00
96.33
100.00

Net Foreign Inflow for the Week

Net Foreign Inflow YTD

Top Five Gainers

Top Five Losers

Global Markets - Week in review

Stock markets had another volatile week amid further worries about the

Global Equities
S&P 500
FTSE 100
NIKKEI 225
Hong Kong Hang Seng
S&P/ASX 200

slowing Chinese economy. The swings in Chinas share indices were less marked
than of late, following speculation that the government had recommenced its
stock purchases through state-owned firms to try to calm the markets. The
authorities are intervening in other ways, parading on television a financial
journalist who confessed to the crime of reporting on the market turmoil by
adding his personal judgment and subjective views to the news. An inquiry
Commodities
also began into alleged market manipulation.

The euro zones unemployment rate dipped to 10.9% in July, the lowest it has

Oil (Brent) USD/bbl

Gold USD/t oz
Aluminium USD/mt
Copper USD/mt
Cotton cents/lb
Chart of the Week

Level
1,951.13
6,074.65
17,792.16
20,840.61
5,040.60

1 Week
(1.90)
(2.77)
(7.02)
(3.57)
(4.24)

YTD
(5.23)
(7.48)
1.96
(11.71)
(6.85)

1 Year
(2.33)
(11.68)
13.50
(17.62)
(10.49)

2 Yr. Cum
18.03
(6.18)
26.60
(6.65)
(2.34)

04/09/2015 28/08/2014 31/12/2014 04/09/2014 04/09/2013

50.46
50.05
64.16
102.64
97.37
1,118.01
1,133.60
1,184.37
1,261.67
1,391.57
1,630.00
1,603.00
1,852.50
2,105.00
1,789.50
5,246.00
5,135.00
6,300.00
6,930.00
7,124.00
62.62
63.00
64.42
68.76
77.14

been since February 2012. Germany had the lowest rate, 4.7%, and Greece had
the highest, 25% (for the month of May), followed by Spain at 22.2%.
Unemployment in France rose slightly to 10.4%. Annual inflation in the euro
zone was unchanged at 0.2%. The uninspiring economic data come despite a big
stimulus package that the European Central Bank launched in March.
Britains Electoral Commission told the government to reword a question in a
referendum, to be held in either 2016 or 2017, that will ask voters whether they Oil Prices
wish to remain in the European Union. The new phrasing will include a
Oil fell the most in two months, paring the biggest three-day rally in 25 years
reference to leaving as well.
as speculation faded that OPEC might coordinate with other nations to curb
After years of rapid growth by the standards of rich countries, Canada slipped supply. After surging 27% in three days, the most since August 1990, the oil
into recession during the first half of 2015. The economy contracted by 0.5% at prices fell to near USD 50 per barrel. Prices fell as Chinese manufacturing
an annualised rate in the second quarter, following a decline of 0.8% in the first. slowed and U.S. crude stockpiles were forecast to have increased. They rose
Lower commodity prices have caused Canadas mining and energy companies on Monday after the U.S. lowered production estimates and OPEC said its
to cut investment. Australia, another commodity-heavy economy, recorded prepared to discuss fair prices with other producers, but the group also said
growth of just 0.2% in the second quarter from the previous three months (or it wont shoulder the burden of propping up prices on its own.
2% on an annual basis), the slowest rate in two years.
(Source: Bloomberg)

Gold Prices
Gold prices were steadied after a two-day dip as traders took to the sidelines
ahead of a U.S. payrolls report on Friday, which is being closely watched for
clues about the timing of a Federal Reserve interest rate rise. A stronger than
forecast number could boost expectations that the Fed is likely to increase
rates in the near term, which could weigh on gold. The metal benefits from
ultra-low interest rates, which cut the opportunity cost of holding bullion
while also putting pressure on the dollar. Expectations for a September rate
rise have been lowered recently due to global market volatility.
(Source: Reuters)

Barack Obama managed to secure the backing of 34 Democratic senators for

the agreement with Iran to limit its nuclear programme, thereby ensuring that
he can veto any Republican threat to alter the accord, which is adamantly
opposed by Israel. The partners to the dealBritain, China, France, Germany
and Russiahave made it clear that they would not want to renegotiate with
Iran if Congress rejects the agreement.

Lower oil prices and a stronger currency were behind a 14.7% plunge in South
Koreas exports in dollar terms in August compared with the same month last
year, the steepest drop in six years. Petroleum products account for a large
share of Korean exports. In addition, a stronger won is battling with a weaker
Japanese yen in export markets. Chinas devaluation of the yuan has not helped;
a quarter of the countrys exports go to China.
(Source: Economist)
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