Bourse closes flat; turnover tops Rs. 1 b

Wednesday, 18 June 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan shares ended little changed on Tuesday as gains in beverage stocks were offset by losses in diversified holdings, while expectation of a rate cut at the central bank’s policy review this week boosted sentiment, stockbrokers said. The main stock index rose 0.31 points to 6,344.41, its highest close since 6 June 2013. Continued foreign buying and expectation of an interest rate cut have boosted sentiment, and the market has been on a rising trend since late February. The bourse saw a net foreign inflow for the 13th straight session. Foreign investors bought 56.3 million rupees ($ 432,400) worth of shares on Tuesday, extending the net inflow for the past 13 days to 3.97 billion rupees. They have been net buyers of 5.81 billion rupees so far this year. Dealers said investors were waiting to see whether the weekend violence that killed at least three people and left 75 people seriously injured will continue and what impact it could have on the tourism sector. Analysts said the market broadly expects a 50 basis point rate cut this week. “Local interest is seen picking up with interest rates coming down and there are not much of opportunities seen for them to invest,” a stockbroker said on condition on anonymity. The central bank has reduced its key policy rates to multi-year lows, but has not yet seen any improvement in credit and import growth. March credit growth slowed to a four-year low of 4.3% year-on-year. Central bank Governor Ajith Nivard Cabraal told Reuters on 30 May that the bank was creating room to cut interest rates further. The central bank will announce its June monetary policy rates on Wednesday. Turnover was Rs. 1.08 billion, in line with this year’s daily average of 1.01 billion rupees. Shares of Nestle Lanka PLC rose 1.21% to 1,949.40 rupees while conglomerate John Keells Holdings PLC fell 0.60% to 232.60 rupees.

Secondary market bond yields steady ahead of weekly auction

By Wealth Trust Securities Secondary market bond yields closed the day mostly steady yesterday ahead of today’s monitory policy announcement and weekly Treasury bill auction. A limited amount of activity was seen on the two 2018 maturities (i.e. 01.04.2018 & 15.08.18) and the 01st July 2019 maturity within a thin range of 8.19% to 8.20%, 8.28% to 8.30% and 8.70% to 8.71% respectively. In addition, demand for shorter tenor durations saw 2015 maturities continue to change hands within the range of 7.06% to 7.08%, 2016’s within 7.20% to 7.33% and 2017’s within 7.60% to 7.62%. The total offered amount for today’s weekly Treasury bill auction was reduced to Rs. 10 billion (Bn) compared to the Rs. 12 billion on offer last week with Rs.1 billion each on the 91 day and 182 day maturities and Rs. 8 billion on the 364 day maturity. The weighted averages (WAvg’s) at last week’s auction continued its steady descending trend as all three maturities reflected dips of 1 basis point (bp) each to 6.54%, 6.72% and 7.00% respectively. In secondary bill markets, maturities centering the 364 day continued to be quoted at levels of 6.93/98 while December 2014 bills were seen changing hands within the range of 6.70% to 6.75%. In money markets, overnight call money and repo rates averaged 6.97% and 6.53% respectively as surplus liquidity in money market stood at Rs. 14.89 billion yesterday. The Open Market Operations (OMO) department of Central Bank was seen mopping up an amount of Rs. 8.55 billion on a three day basis at a WAvg of 6.61% while a further amount of Rs. 6.34 billion was deposited at its Standing Deposit Rate (SDR) of 6.50%. Rupee remains steady In Forex markets, the USD/LKR rate remained steady; to close the day at Rs. 130.23/130.24 yesterday. The total USD/LKR traded volume for the previous day (16-06-14) stood at US $ 69.90 million. Some of the forward dollar rates that prevailed in the market were 1 month – 130.67; 3 months – 131.51 and 6 months – 132.61.