Tag Archives: Treasury Bills and Bonds Sri Lanka

Weekly Govt Securities Market Steep decline of 1-Yr T-bill to 9.18%

CEYLON TODAY | 17.05.2019

Treasury Bills and Bonds in Sri Lanka

By First Capital Research

Weekly Yield movement & Volume

The secondary market yield curve was seen once again recording a parallel shift downwards, on the back of heavy buying interest primarily centred on the short to mid tenor maturities. The shorter end of the curve witnessed a steep decline in the range of 7-15bps, while the benchmark 364-day bill was seen trading at an intraday low of 9.15 per cent. In the belly-end of the curve, maturities were seen dropping by 2-15bps, while the long tenors witnessed a dip in yields by 3bps.
At the primary bill auction held on 15 May, the three-month and six-month were accepted at a weighted average of 8.52 per cent and 8.88 per cent, respectively, while the benchmark one-year witnessed a steep dip by 26bps to record at 9.18 per cent following its previous week’s dip of 37bps. Post auction, on the back of buying interest one-year bill dipped further to close the day at 9.10 per cent.
Meanwhile, in the forex market, the rupee depreciated mid-week to Rs 176.74 from opening levels of Rs 174.90/10, thereafter, the rupee slightly appreciated to close the week at Rs 176.17.


Liquidity and CBSL Holdings

Market liquidity remained positive throughout the week to close the week at Rs 25.05 billion on the back of release of long-delayed payments by the Government. CBSL continued to drain out liquidity by way of repo auctions throughout the week at weighted averages ranging between 8.38 per cent and 8.59 per cent.


Foreign Interest

Foreign holding decreased by Rs 10.8 billion to record at Rs 143.7 billion. Foreign holding percentage dipped to 2.7 per cent from a previous level of 2.9 per cent.


Maturities for next Week

The Government Security Market has a Treasury bill maturity amounting to Rs 16.1 billion that needs to be settled week ending 24 May 2019.


Daily Summary

Thursday (09.05.19): In the secondary market, shorter end of the yield curve witnessed a steep downward shift with heavy demand, while the overall market witnessed moderate volumes. The one-year bill also recorded a notable dip to close at 9.15 per cent. During the morning hours of trading there was a slight increase in yields mainly centred on [15.03.24] maturity which traded at 10.62 per cent in the midst of profit taking. However, towards the latter part of the day, with buying interest it was seen trading at intra day’s low of 10.52 per cent. Furthermore, following maturities traded at their intra-day lows as [01.07.19] traded at 8.60 per cent, [15.12.20] at 9.60 per cent, [15.03.22] at 10.00 per cent, [15.07.23] at 10.40 per cent and [01.09.23] at 10.42 per cent. In the long end of the curve, [01.05.29] changed hands at 10.95 per cent.

 
Friday (10.05.19): Continuing positive sentiment drives secondary market yield curve downwards across the board reinforced with net surplus liquidity in the system including term repo, recording a high of Rs 89.24 billion. Buying interest was witnessed on the following maturities trading at intraday lows with the one-year trading at 9.15 per cent with considerable volumes, while [01.05.20] traded at 9.13 per cent. Foreign buying was seen on the 2021 maturities with [01.08.21] trading at intraday lows of 9.75 per cent and [15.10.21] at 9.80 per cent. Local buying interest was seen on [15.03.22], [15.03.23], [15.07.23], [15.03.24] trading at day’s low of 9.95 per cent, 10.25 per cent, 10.30 per cent, 10.40 per cent, respectively. In addition, [15.01.27] traded at 10.72 per cent with considerable volumes, as [15.06.27] traded at 10.80 per cent, while overall market witnessed high volumes.

 
Monday (13.05.19): The secondary market yield curve remained mostly unchanged with mixed activities, while the overall market witnessed high volumes for the day. In the short end of the curve, [15.12.20] traded in the range of 9.75 per cent-9.85 per cent levels, [15.03.22] at 9.90 per cent and [15.03.23] at 10.30 per cent. Mid tenor [15.03.24] witnessed high volumes trading at 10.40-10.47 per cent levels, while on the back of foreign buying, [01.08.24] traded at 10.46 per cent. Furthermore, in the midst of buying interest, the following maturities were seen trading at their intra-day lows: [01.06.26] at 10.67 per cent, [01.08.26] at 10.65 per cent, [15.06.27] at 10.75 per cent. In the long end of the curve, [01.05.29] changed hands at 10.86 per cent.

 
Tuesday (14.05.19): With the prevailing tensed situation mixed activity was witnessed in the secondary market with a slight upward shift in the yield curve amidst high volumes. Selling pressure was witnessed during the early hours of trading on the following maturities trading at their intraday high with [01.03.21], [01.05.21], [01.08.21] and [15.12.21] trading at 9.85 per cent, 9.88 per cent, 9.92 per cent and 10.00 per cent, while [01.05.21], [01.08.21] and [15.12.21] traded at 9.85 per cent, 9.88 per cent, 9.92 per cent and 10.00 per cent, and [15.03.23] and [15.07.23] traded at day’s high of 10.50 per cent and 10.48 per cent, respectively, In addition, [15.01.27], [15.06.27], [01.05.29] all traded at 10.80 per cent, while [01.05.29] traded at 10.92 per cent. During the latter session of trading, foreign buying was seen primarily centred on [15.03.24] at 10.50 per cent, while the one-year T-bill traded at day’s high of 9.25 per cent.

 
Wednesday (15.05.19): Selected mid to long tenure maturities were seen reaching intraday low amidst the buying interest, with [15.03.23] reaching 10.35 per cent, foreign buying led [15.03.24] to the day’s lowest of 10.41 per cent and [15.01.27] traded at 10.73 per cent, while the overall yield curve shifted slightly downwards, with overall market witnessing moderate volumes. At the primary bill auction, yield of three-month crawled to 8.52 per cent, six-month yield dipped to 8.88 per cent and one-year yield dipped to 9.18 per cent, recording a near eight-month low since September 2018. Post auction, on the back of buying interest, the one-year bill dipped further to close the day at 9.10 per cent, while three short term 2021 maturities ([01.03.21], [01.08.21] and [15.10.21]) traded at 9.65 per cent, 9.75 per cent and 9.85 per cent, respectively.

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the Bond and equity Market performance – 09.05.2019

Treasury Bills and Bonds in Sri Lanka

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the bond and equity market performance – 09.05.2019

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the Bond and equity Market performance – 07.05.2019

Treasury Bills and Bonds in Sri Lanka

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the bond and equity market performance – 07.05.2019

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Dimantha Mathew, Head of Research, at First Capital on the bond and equity market performance – 06.05.2019

Treasury Bills and Bonds in Sri Lanka

Dimantha Mathew, Head of Research, at First Capital on the bond and equity market performance – 06.05.2019

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Dimantha Mathew, Head of Research, at First Capital on the bond and equity market forecast – 05.05.2019

Treasury Bills and Bonds in Sri Lanka

Dimantha Mathew, Head of Research, at First Capital on the bond and equity market forecast – 05.05.2019

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

 

Sri Lankan stocks reaching bottom of cycle

ECONOMY NEXT | 17.04.2019

Stock Brokers in Sri Lanka

Sri Lanka’s stock market is heading towards the bottom of a cycle, with opportunities for buying and potential recovery in the coming quarters, a research house said.

“With the recent stock market plunge, we believe that we inaccurately assessed the market to be at the depression stage during the December 2018 period,” the research arm of First Capital, an investment bank, said.

“Considering the reactions of the market participants it was evident that the ASPI was at the latter part of the “Anger” stage in the psychological cycle.”

“The positive developments experienced in the recent past, the upcoming election season, liquidity improvement and the possible rate cut are considered to be a number of possible trigger points for an upside in the market,” it said.

The investment bank said that the power struggle in parliament has died down following the passing of the budget in March and April, while the upcoming election season may boost economic activity and renew consumer demand.

“Thereby, we believe the ASPI (All Share Price Index) is likely to be entering the depression stage in the current market cycle with a considerable number of positive expectations over the next few quarters.”

First Capital said it has increased its portfolio to 80 percent equity holdings in April, from 60 percent in December, as the ASPI is expected to return to 6,000 levels in the next quarters.

In the 3 months from December 26 to April 02, the ASPI had dipped 7 percent with panic selling on the back of weak earnings, it said.

The ASPI closed around 5,591.83 on Wednesday.

First Capital Research said with a stabilizing rupee and a reform program with the International Monetary Fund back on track, foreign inflows to equity markets are expected to accelerate, amidst strong valuations.

Index-heavy stocks are attractive, it said.

“As we gradually turn bullish on stocks, we recommend investors to accelerate accumulation into blue chip counters which are trading at heavy discounts.”

“For investors who are already into equities, we believe this is an opportune period to increase exposure and average the existing portfolios.”

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the Bond and equity Market performance – 16.04.2019

Treasury Bills and Bonds in Sri Lanka

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the bond and equity market performance – 16.04.2019

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

1-Yr T-bill records at single-digit 9.99 per cent

CEYLON TODAY | 12.04.2019

Treasury Bills and Bonds in Sri Lanka

Accelerate equity accumulation to 80 per cent exposure

CEYLON TODAY | 11.04.2019

Investment in Sri Lanka

In our last update on 26 December 2018, equity exposure was increased to 60 per cent (from 50 per cent) despite the risk associated in the economy and the weak outlook in the 1Q2019. During the three months (26 December – 2 April) the ASPI dipped by seven per cent, with panic selling among all fronts on the back of weak earnings.

However, the market has recovered over 130 points in the last six days, signaling a bottoming-out effect. We recommend increasing equity exposure upto 80 per cent reducing cash allocation from 40 per cent to 20 per cent, on the backdrop of the positive developments on the liquidity, external sector, possible rate cut and potential foreign inflows.

As we gradually turn BULLISH on stocks, we recommend investors to accelerate accumulation into blue chip counters, which are trading at heavy discounts. For investors who are already into equities, we believe this is an opportune period to increase exposure and average the existing portfolios. On a broader note, we expect market returns to be positive over the next few quarters, with the ASPI edging back towards the 6,000 mark with some resistance towards 5,800.

Amanda Lokugamage, Senior Research Analyst, at First Capital on the bond and equity market performance – 10.04.2019

Treasury Bills and Bonds in Sri Lanka

Amanda Lokugamage, Senior Research Analyst, at First Capital on the bond and equity market performance – 10.04.2019

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.