BOC bond snapped up; rupee firmer

Saturday, 28 April 2012 00:00 - - {{hitsCtrl.values.hits}}

The Bank of Ceylon’s (BOC) historic $ 500 million five year Bond was snapped up on Thursday with 7.7 times oversubscription drawing bids worth $ 3.86 billion.

The bond was concluded at a rate of 6.875%, more or less within the range anticipated by the issuer and its joint book runners.

Prior to the issuance BOC and book runners marketed the Bond in select global financial markets.

BOC Chairman Gamini Wickramasinghe described the success as a milestone and underscored investor confidence on the Bank. It also provided the banking giant an opportunity to tap global markets for fresh capital.

“With this bond issuance, BOC has now accessed the global investor base,” he said in a statement adding that the Bank intends to use the proceeds of the bond for ‘general corporate purposes.’

The Rupee meanwhile ended 0.6 per cent firmer yesterday as exporters and a State bank bought the currency a day after the Central Bank asked the market to step in to help, Reuters said quoting unnamed dealers.

The rupee ended at 129.90/130.00 against the dollar, up from Thursday’s close of 130.50/131, on thin volume, due to lingering depreciation fears.

“Exporters sold dollars, while the market also saw a state bank selling $ 3 million to the market, which helped the currency to recover,” a currency dealer said on condition of anonymity.

The rupee has recovered 2.7 per cent since it hit an all-time low of 133.50 on Wednesday.

On Thursday Central Bank officials at a meeting with currency dealers had called for an end to speculation that it said had hurt the currency and asked them to try to convince exporters to convert their dollar holdings.

The rupee has depreciated 12 per cent since the Central Bank stopped intervening to defend a specific price on 9 February, and 15.1 per cent from 19 November, when the Government allowed a three per cent devaluation.

The Central Bank said it expected the BOC bond proceeds to support the rupee, but traders were less optimistic.

The stock market meanwhile edged down 0.08 per cent, or 4.49 points, to 5,440.52 with investors worried about the rupee, rising interest rates and slowing economic growth.

The day’s turnover was Rs. 778.9 million ($ 5.95 million), well below this year’s daily average of Rs. 1.2 billion.

The market saw a foreign outflow of Rs. 44.8 million, but so far this year, foreign investors have been net buyers of Rs. 21.3 billion.

The Colombo Bourse is one of the worst performing Asian markets this year, losing 10.4 per cent.

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