Seasonal mood sees activity in secondary bond markets moderate

Friday, 10 April 2015 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Activity in secondary bond markets moderated yesterday with yields closing the day broadly steady as most market participants were seen in a holiday mood. Limited trades were witnessed on the liquid maturities of 15.09.2019, 01.08.2021 and 01.09.2023 within the range of 9.07% to 9.10%, 9.40% to 9.48% and 9.80% to 9.85% respectively while yields on the rest of the yield curve remained steady. Meanwhile, in money markets yesterday, overnight call money and repo rates increased to average 6.70% and 6.72% respectively despite surplus liquidity increasing to Rs. 57.23 billion once again. Rupee dips once again In Forex markets, the dollar/rupee (USD/LKR) rate on one week forward contracts was seen dipping once again to close the day at Rs. 133.33/40 against its previous day’s closing levels of Rs. 133.25/30 on the back of importer-led demand. The total USD/LKR traded volume for 8 April 2015 was at $ 87 million. Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 133.90; 3 Months - 135.02 and 6 Months - 136.80.

Stock market dip persists

Reuters: Shares fell to a more-than-one-week low on Thursday led by illiquid shares such as Ceylon Tobacco Company Plc and Commercial Leasing and Finance Plc in low-volume trade while many investors and brokers stayed away ahead of holidays, dealers said. The index ended 0.21% down at 6,899.29 on Thursday, its lowest close since 31 March. Shares in Ceylon Tobacco fell 0.97%, while Commercial Leasing and Finance declined 4.76%. Both shares fell on just one trade each. “Market is down on illiquid shares. But the turnover was good,” said research manager at First Capital Equities Ltd. Dimantha Mathew, adding that blue-chips like John Keells Holdings and Commercial Bank of Ceylon Plc boosted the turnover. The day’s turnover was Rs. 657.6 million ($ 4.95 million), just above half of this year’s daily average of Rs. 1.12 billion. The market will be closed on 13 and 14 April for the traditional Sinhala and Tamil New Year holiday. The index had lost 6.6% last month, its biggest monthly drop since October 2012, as investors sold their holdings to settle margin trades amid concerns about political stability and a rise in interest rates. Yields on T-bills rose at Wednesday’s auction by 1 to 15 basis points after it had fallen between 55 basis points and 63 basis points in the three weekly auctions through 1 April. Analysts expect trading to stay thin through mid-April ahead of the New Year holiday and amid political uncertainty. Shares in John Keells Holdings Plc fell 0.20% while Commercial Bank of Ceylon Plc fell 0.36%.

Rupee forwards end lower on importer dlr demand

Reuters: Rupee forwards ended weaker on Thursday as importer dollar demand outpaced inflows from remittances and selling of the greenback by exporters, dealers said. Actively traded one-week forwards ended at 133.33/40 per dollar, compared with Wednesday’s close of 133.24/26. “Remittances are drying down and we have seen some importer (dollar) demand today,” said a currency dealer on condition of anonymity. People have been converting dollars into rupees ahead of public holidays on 13 and 14 April, dealers said, adding the local currency was expected to gain on higher seasonal inward remittances ahead of the Sinhala-Tamil New Year on 14 April. The Central Bank through moral suasion prevented the spot rupee from dropping below 132.90/133.20, a limit it set in February. Central Bank officials were not available for comment. Sri Lanka’s Government borrowing has risen sharply since January, Central Bank data showed on Monday, as the new Government has sharply increased state sector wages and lowered duties on key commodities. The increased borrowing has put pressure on Government finances and pushed up yields on Treasury Bills by between 76 and 82 basis points (bps) since 7 January. Sri Lanka’s Parliament, however, rejected a plan on Tuesday to increase government borrowing limits by Rs. 400 billion after public spending surged in the run-up to parliamentary elections scheduled for after 23 April. Yields on T-bills increased by 1 to 15 bps at Wednesday’s auction, the first gain after falling between 55 and 63 bps in the three weekly auctions through 1 April.