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Wednesday February 1st, 2023

Sri Lanka bond yields extend fall on DDR comments

ECONOMYNEXT – Sri Lanka Treasury bond yields were down around 100 basis points on Tuesday and T- bill rates were down on active trade, after the President Ranil Wickremesinghe’s comments last week on local debt restructuring, dealers said.

“Even though there is a small delay the market is reacting to that,” a dealer said.

“We are trying to avoid damage to the domestic structure but everyone will have to take a fair share,” President Wickremesinghe was quoted as saying on Sri Lanka’s Daily FT newspaper.

“So far, we have only looked at the foreign and as far as the local debt is concerned, we are working to minimise the impact. There is no need to panic. If all the taxes come in, we will be able to avoid it completely.”

According to some bond market players, interest rates will fall close to 20 percent if there was no domestic debt restructuring.

State Minister Shehan Semasinghe said a decision on domestic debt re-structure will be made after getting financial assurances from bilateral creditors.

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Sri Lanka still believes domestic debt re-structure is not required: Minister
Bond yields started to go up and investors stopped buying long term bond after President Wickremesinghe said financial advisors were looking at domestic debt re-structuring.

A bond maturing on 15.01.2028 ended at 30.75/31.00 percent on Tuesday, down from 31.75/32.00 percent on Monday.

A bond maturing on 01.07.2032 closed at 29.00/30 percent on Tuesday, down from 30.10/90 percent.

A bond maturing on 01.07.2025 closed at 31.00/20 percent on Tuesday, down from 32.00/30 percent from the last close.

The three-month T-bills closed at 32.00/30 percent doon from the previous close of 32.75/33.00 percent.
The Central Bank’s guidance peg for interbank transactions remained unchanged at 363.50 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers between 372.00 and 372.10 for small transactions, data showed.

Buying rates are between 362.00 – 362.10 rupees. (Colombo/Nov 22/2022)

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Sri Lanka bond yields down at close

ECONOMYNEXT – Sri Lanka’s bond yields were down at close following a bond auction on Wednesday, dealers said while a guidance peg for interbank transactions remained unchanged.

“The rates were steady at the auction,” a dealer said.

“This can be a signal to the market saying the rates will go down in the future.”

A bond maturing on 01.07.2025 closed at 32.40/60 percent, down from yesterday’s 32.60/85 percent.

A bond maturing on 01.05.2027 closed at 29.10/35 marginally down from yesterday’s 29.20/75 percent.

The Central Bank’s guidance peg for interbank US dollar transactions remained unchanged at 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 371.38 rupees on Friday, data showed. (Colombo/Feb 01/2022)

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Sri Lanka bill auction hits pothole after 2025 bond spike

ECONOMYNEXT – Sri Lanka sold only 45 billion rupees in Treasury bills at Wednesday’s auction after offering 120 billion rupees, data from the state debt office showed, amid market confusion over a spike in a two year bond at an earlier action.

30.1 billion rupees of 3-month bills were sold at 29.91 percent, unchanged from a week earlier after offering 60 billion rupees for auction.

5.1 billion rupees of 6-month bills were sold at 28.72 percent, flat after offering 30 billion.

10.3 billion rupees of 12-month bills were sold at 27.72 percent after offering 30 billion.

Phase II subscriptions have been opened.

The market was foxed after the 2025 bonds were accepted at sharply higher yield than market on January 30, dealer said.

There was further confusion as the there was an outright purchase of 2025 at around 29 percent earlier in January.

Some investors speculated that the authorities were trying to drive more buyers towards short end bonds as bill volumes were getting larger. (Colombo/Feb01/2023)

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Sri Lanka services exports down 5.9-pct in 2022

ECONOMYNEXT – Sri Lanka’s services exports were estimated to have fallen 5.9 percent to 1,876.3 million US dollars, the island’s Export Development Board said.

Services exports estimated is made up of ICT/BPM, construction, financial services, transport and logistics.

There are more than 500 ICT companies, the EDB said.

Sri Lanka’s merchandise exports were up 4.6 percent to US dollars 13.1 billion dollars in 2022 from 2021.

Sri Lanka’s goods exports are slowing amid lower growth in Western markets. (Colombo/ Feb 01/2023)

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