Sentiment turns bearish during the week

Monday, 1 December 2014 00:47 - - {{hitsCtrl.values.hits}}

Activity dips considerably during the week By Wealth Trust Securities The uncertainties that crept into markets during the previous week, was seen continuing during the week ending 28 November as well, leading to the sentiment in secondary bond markets turning bearish. Activity was seen dipping considerably during the week as neither the outcome on inflation for the month of November at where its point to point average was seen dipping further to 1.50% and its annualised average to 3.50% or

the weighted averages at the weekly Treasury bill auctions continuing to remain stagnant had a positive impact on sentiment. The limited amount of activity witnessed during the week centered on the two 2018 maturities (i.e. 01.04.2018 and 15.08.2018) within the range of 7.10% to 7.15% and 7.20% to 7.30% respectively, the 01.07.2019 within 7.30% to 7.35% and the 01.07.2022 within 8.10% to 8.20%. In money markets, overnight call money and repo rates remained steady during the week to average 6.00% and 5.51% respectively as surplus liquidity averaged Rs. 16.22 billion for the week ending 28 November. Liquidity was drained out by way of repo auctions during the week, for durations ranging from 4 days to 77 days at weighted averages of 5.96% to 6.03%. Rupee loses ground during the week The prevailing importer demand coupled with uncertainties saw the rupee on spot next-next contracts (Forward contracts) depreciate during the week to close the week at Rs. 131.50/60 against its previous weeks closing of Rs. 131.25/40, subsequent to dipping to an intra-week low of Rs. 132.50 in the absence of activity on spot and spot next contracts. The daily USD/LKR average traded volumes for the first four days of the week stood at $ 50.80 million. Some of the some forward dollar rates that prevailed in the market were 1 month – 132.12; 3 months – 132.55 and 6 months – 134.28.