Secondary market bond yields remain steady as activity comes to an halt
Friday, 5 December 2014 00:52
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By Wealth Trust Securities
Secondary market bond yields closed the day steady yesterday as activity continued to remain very dull.
The market favourite maturities of 15 August 2018, 1 July 2019 and 1 July 2022 were seen closing the day at levels of 7.27/35, 7.35/45 and 8.27/32 respectively while the shorter maturities of 15 May 2017 and 1 April 2018 were seen closing at levels of 6.95/05 and 7.18/25 respectively.
In secondary bill markets, the 364 day bill continued to be quoted at levels of 5.95/00 and the 182 day bill at 5.75/79.
In money markets, the weighted averages on overnight call money and repo rates deceased to 6.03% and 5.57% respectively due to most market participants having already utilised their option of accessing the SDF rate of 6.50% for three times a month.
The Open Market Operations (OMO) department of Central Bank was seen conducting two term repo auctions yesterday for durations of 56 days and 77 days at where a total amount of Rs. 7.60 billion was drained from the system at weighted averages of 6.10% and 6.08% respectively, as surplus liquidity stood at Rs. 13.58 billion yesterday.
Rupee depreciates further
In Forex markets, continued importer demand saw the dollar/rupee (USD/LKR) rate on spot next-next contracts depreciate further to hit a daily low of Rs. 131.85 and close the day at levels of 131.85/95 against its previous day’s closing levels of Rs. 131.875/85. The total USD/LKR traded volume for 3 December was at $ 72.60 million.
Some of the forward dollar rates that prevailed in the market were: one month – 132.42; three months – 133.28; and six months – 134.55.
Bourse ends weaker on low turnoverReuters: Stocks ended weaker on Thursday, erasing early gains as investors sold select shares and on caution due to political uncertainty ahead of the 8 January presidential poll, analysts said.
The main stock index fell 0.27%, or 19.63 points, to close at 7,254.80.
Nine loyalists from President Mahinda Rajapaksa’s United People’s Freedom Alliance, including Health Minister Maithripala Sirisena, have defected since he announced a snap poll on 20 November. Sirisena is contesting against Rajapaksa as the consensus candidate of a united opposition.
Speculation that more could defect in the coming days and likely violence ahead of polling also weighed on sentiment, analysts said.
“People are in a wait-and-see approach. They may be waiting until nominations are filed next week to see the trend,” said Dimantha Mathew, manager - research, First Capital Equities Ltd.
Turnover stood at Rs. 865.5 million ($ 6.6 million) on Thursday, exchange data showed, well below this year’s daily average of Rs. 1.44 billion.
Foreign investors net bought Rs. 665.2 million worth of shares on Thursday, extending purchases during the year to Rs. 21.56 billion, exchange data showed.
Analysts expect volatility to continue and the overall index to be flat until the elections on 8 January.
Carson Cumberbatch Plc led the fall, ended 4.54% weaker, while Ceylinco Insurance Plc fell 8.09%.
Lanka IOC Plc fell 3.84%.
Rupee forwards end weaker on importer dollar demandReuters: Rupee forwards ended weaker on Thursday as dollar demand from importers outpaced offloading of the greenback by exporters, dealers said.
The spot currency and three-day forwards, or spot-next, were not traded after the Central Bank capped the currency at predetermined levels to prevent volatility.
Central Bank officials were not available for comment.
Dealers said actively traded four-day forwards, or spot-next-next, ended at 131.95/132.00 per dollar compared to Wednesday’s close of 131.80/85.
“The rupee is weaker on importer (dollar) demand,” a currency dealer said.
Overseas investors bought a net Rs. 456.7 million worth Government securities during the week ended 26 November. They sold a net Rs. 38.6 billion ($ 294.66 million) in the nine weeks through 26 November, data from the Central Bank showed.
