Sri Lanka rupee closes weaker, bond yields rise on political uncertainty
Thursday February 7, 2019 17:34
ECONOMYNEXT- Sri Lanka’s rupee closed weaker on Thursday at 177.75/85 to the US dollar in the spot market and bonds yields ended marginally higher amid political uncertainty while stocks gained 0.04 percent, dealers said.
The rupee was 177.65/80 to the US dollar in the spot market on Wednesday.
Finance Minister Mangala Samaraweera had said the rupee was strengthening due to inflows into government securities and he expected further appreciation.
Bonds were being sold, leading to rising yields after a 300 million dollar syndicated loan from the Bank of China was delayed due to the Lunar New Year holiday, dealers said.
Political uncertainty also saw bonds being sold, as the government did not to bring a motion in parliament to create a coalition government.
Investors were concerned over this, as the government may not be able to get a majority vote to pass the budget next month, dealers said.
Twelve month bills were quoted at 10.70/80 percent on Thursday, up from 10.65/75 percent yesterday. At a bill auction Wednesday, 12-month bills were sold at a weighted average of 10.69 percent.
A bond maturing on 01.08.2021 closed at 10.90/97 percent on Thursday, up from yesterday’s closing of 10.85/95 percent.
A bond maturing on 15.12.2023 saw foreign buying interest, closing at 10.97/02 percent, falling from 11.00/03 percent at Wednesday’s close.
A 7-year bond maturing on 01.08.2026 was quoted at 11.20/28 percent, wider from 11.20/24 percent a day earlier.
A bond maturing on 15.01.2027, was quoted at 11.27/30 percent, flat from Wednesday
A bond maturing on 01.09.2028 was quoted at 11.35/45 percent, with no change from yesterday.
At the Colombo Stock Exchange, the All Share Price Index closed with a marginal gain of 0.04 percent or 2.38 points to 5,959.79 on Thursday, while the more liquid stocks in the S&P SL20 Index were down 0.15 percent or 4.50 points to 3,053.25.
Market turnover was 797 million rupees with foreign selling.
There was 685.1 million rupees in net foreign outflows from the market.
Distilleries Company of Sri Lanka share, up 50 cents to 16.30 rupees, contributed to the All Share’s gain along with Ceylinco Insurance, up 79 rupees to 1,999 rupees per share.
There was selling in John Keells Holdings, down 90 cents to 156 rupees per share, and Dialog Axiata, down 10 cents to 10 rupees per share.
Softlogic Life Insurance and Commercial Bank shares were also lower.
Overall, prices of 55 shares were up and 51 down at closing on Thursday.(Colombo/Feb07/2019 – SB)