ECONOMYNEXT – The rupee opened at 176.80/177.00 rupees to the US dollar in the spot market Wednesday morning, while gilt yields were flat and stocks opened 0.11 percent lower on selling interest in Distilleries Company of Sri Lanka, Hatton National Bank and Brown and Company, market participants said.
The rupee closed at 176.80/90 to the greenback on Tuesday.
Liquidity in the overnight money market remained around 20 billion rupees for the second consecutive day, after the central bank mopped up excess liquidity of over 82 billion rupees seen last week.
Dealers said the current level of liquidity was optimal, and if it fell to around 10 billion rupees, investors may start selling bonds, leading to an upward movement in rates.
The state debt office will be selling 21 billion rupees in Treasury Bills later today, in the form of 4 billion rupees each of 3-month and 6-month bills and 13 billion rupees in 12-month bills.
Dealers said 12-month bills were currently trading below the previous weighted average, and rates are likely to ease at today’s auction.
Twelve month bills were trading around 9.20/28 percent on Tuesday, compared to the May 08 weighted average of 9.44 percent.
Dealers said gilt yields were steady in active trading in the secondary market Wednesday morning.
A bond maturing on 15.12.2021 opened at 9.90/00 percent, gaining from 9.85/95 percent on Tuesday.
A 3-year bond maturing on 15.03.2022 opened at 9.95/05 percent, stable from the previous close of 9.95/10.03 percent.
A bond maturing on 15.03.2024 was steady at 10.50/52 percent, steady from the previous close of 10.50/55 percent.
A 7-year bond maturing on 01.08.2026 opened unchanged at 10.70/75 percent.
A bond maturing on 15.01.2027 opened flat at 10.75/80 percent.
A 10-year bond maturing in 01.05.2029 was 10.85/95 percent, up from 10.80/90 percent on Tuesday.
In equities, Colombo’s All Share opened lower at 5.61 points, down to 5,218.08 and the S&P SL20 of more liquid stocks fell 0.16 percent, down at 3.96 points to 2,455.19.
Market turnover was 11.5 million rupees in the fist hour of trading, with 15 stocks gaining and 20 declining.
Distilleries Company stocks fell 0.20 cents to 13.50 rupees, Hatton National Bank declined 2.10 rupees to 147.50 rupees and Brown and Company opened red at 3.20 rupees to 36.90 rupees.
(COLOMBO, 15 May 2019)