Sri Lanka rupee opens weaker, bonds steady ahead of budget
Tuesday March 5, 2019 10:08
ECONOMYNXT – Sri Lanka’s rupee opened weaker at 179.80/90 to the US dollar in the spot market on Tuesday, and bonds were quoted slightly wider, with some trading ahead of a budget to be presented in parliament at 1400 hours.
The rupee closed at 179.55/70 to the US dollar on Friday, which was when the market last traded, as Monday was a holiday.
Sri Lanka’s people and business wait in trepidation as there is a habit in the country for mulitiple secretly hatched tax hikes to be slammed on the people during budget, unlike in countries like Singapore and Vietnam where there is stability in the tax regime, giving more certainty to investors.
Sometimes taxes do not last even one year without a hike.
Sri Lanka, however, revamped the tax system through a new inland revenue law last year, which may require tweaking.
Finance Minsiter Mangala Samaraweera is expected to present a budget with a deficit of 4.4 percent of gross domestic product for 2019, with the 2018 gap estimated at 5.3 percent, slightly higher than the 4.8 percent oriignally budgeted for the year.
Dealers said yields in the bond market were around the same levels as Friday with some maturities being quoted slightly wider.
There were a few trades, with many holding on until they consider the direction of the budget, dealers said.
A bond maturing on 01.08.2021 was quoted at 10.70/78 percent today, falling from Friday’s close of 10.75/78 percent.
A bond maturing on 15.07.2023 quoted at 10.93/00 percent on Tuesday, wider from the previous close of 10.95/98 percent.
A 7-year bond maturing 01.08.2026 was quoted at 11.12/20 percent, marginally lower than Thursday’s close of 11.13/20 percent.
A bond maturing on 15.06.2027, quoted at 11.18/28 percent today, wider from yesterday’s close of 11.20/25 percent.
A bond maturing on 01.09.2028 quoted at 11.27/37 percent, wider from the previous close of 11.28/35 percent.
At the Colombo Stock Exchange, the All Share Price Index was up 0.24 points or 13.79 percent at 5,768.10 in the first half hour of trading.
The more liquid stocks on the S&P SL20 Index were up 0.52 percent, or 14.98 points at 2,883.01.
Market turnover was 172.13 million.
The market was gaining on John Keells Holdings Plc, which was trading 3 rupees higher at 158 rupees per share.
Trading in John Keells accounted for 92.7 percent of the turnover. (Colombo/Mar05/2019-SB)