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Bloomberg Comment – 09-08-2018

LKR Bonds Seen Boosted as Yields Drop at Sale: Inside Sri Lanka
2018-08-09 02:56:04.240 GMT
By Anusha Ondaatjie

(Bloomberg) — Sri Lanka’s bond prices will probably be boosted after government borrowing costs dipped at an auction of treasury bills Wednesday.

* Central bank sold 20.5b rupees ($128m) of treasury bills, including 12.9b rupees of 364-day bills at 9.16%, down from 9.23% at previous auction

** It also sold 2.62b rupees of 182-day bills at 8.70% vs prev 8.74% and 5b rupees of 91-day notes at 8.16% vs 8.17%

* “Local institutional buying, in spite of foreign selling, could keep yields on a declining trajectory,” says Dimantha Mathew, head of research at First Capital in Colombo

* Yield on 10% govt bonds due March 2023 was little changed at 9.85% Wednesday, after declining for the previous seven days: data compiled by Bloomberg

* USD/LKR steady at 159.85 Thursday

* Overseas investors bought a net $3.6m of local shares on Wednesday, helping trim outflows for this month to $2.7m: exchange data