Sri Lanka rupee opens steady; stocks flat and bond yields rise
Apr 09, 2019 10:29 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - The Sri Lanka rupee opened steady at 174.65/80 rupees against the US dollar in the spot market Tuesday, as gilt yields rose and stocks traded flat amidst buying interest telco, banking and insurance stocks, market participants said.
The rupee ended the previous day at 174.60/70 rupees against the greenback.
Market participants expect the rupee to remain stable against the US dollar over the near term.
"Import demand is low because of sluggish credit growth, and we don't expect the credit cycle to change over the near term. Foreign investor sentiment will likely improve as the government successfully settles maturing sovereign bonds, so expectations are for the currency to remain stable" a market participant said.
Sri Lanka will settle a five-year 500 million US dollar sovereign bond which matures on 11 April with proceeds from a bond issue earlier this year.
The larger banks were seen selling US dollars in the market on Monday, an indication that foreign inflows will likely improve as investor sentiment picks up, dealers said.
In equities, Colombo's All Share gained 0.01 percent in early trading, up 0.77 points to 5,596.23, and the S&P SL20 of more liquid stocks was up 0.03 percent, gaining 0.78 points to 2,721.86.
Dialog was up 10 cents to 9.50 rupees, Janashakthi Insurance gained 1 rupee to 26.50 rupees and NDB Bank gained 90 cents to 96 rupees.
Sampath Bank was down 2 rupees to 167 rupees and LOLC Finance lost 10 cents in early trading to 3.30 rupees.
Gilt yields increased with activity picking up in the secondary market on Tuesday after the Central Bank kept policy rates steady on Monday.
"There's growing foreign interest in shorter term bonds like the 2021 and 2022," a dealer said.
A bond maturing in 2021 was trading at 10.40/50 percent, up from 10.32/40 percent the previous day.
The 2022 bond was up at 10.58/68 percent, gaining from the previous day's 10.50/65 percent.
A bond maturing in 2023 gained to 10.82/90 percent, up from 10.70/85 percent the previous day.
A bond maturing in 2024 was up to 10.90/11.00 percent, gaining from 10.84/11.00 percent on Monday.
The 2029 bond yield rose to 11.25/35 percent, up from 11.20/30 percent the previous close. (COLOMBO, 9 April 2019)