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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Sri Lankan stocks extend gain on rate cut

Sri Lankan stocks extend gain on rate cut

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Policy rates cut for the first time in two years
Sri Lankan stocks extend gain on rate cut Untitled-27
By Wealth Trust Securities
The surprise easing of monetary policy by way of the Central Bank reducing its policy rates by 25 basis points (bp) at its monthly monetary board meeting for December saw the primary and secondary markets on Treasury bills and bonds take a bull run yesterday as yields dipped considerably.

At the weekly primary Treasury bill auction, weighted averages stumbled across all three maturities with the 364 day bill reflecting the sharpest decline of 41 bp to 12.45%, while the 91 day and 182 day bills dipped by 35 bp and 32 bp respectively to 10.44% and 11.78%.
As is the trend when rates are on a declining path, attention shifted away from the 182 day maturity to the 364 day maturity at the auction as 63% of the total accepted amount was represented by this maturity.
Meanwhile, in secondary bond markets, yields reflected a similar dip mainly on the more liquid three year, five year and six year maturities. The six year maturity opened the day at levels of 12.80% to 12.85%, down from its previous day’s closing levels of 13.35% subsequent to the policy announcement and edged up to an intraday high of 13.05% on the back of profit taking. However buying interest at these levels saw its yields dip once again to close the day at levels of 12.80%-12.85%.
Furthermore the three year maturity was seen been traded within the range of 12.25%-12.35%, while the five year was seen changing hands within the range of 12.50%-12.60%. In addition, secondary market bills was seen trading well below its weighted averages subsequent to the auction, with the 182 day bill been traded at a low of 11.40% and the 364 day bill at 12.15%.
Overnight call money and repo rates adjust to policy change
Overnight call money and repo rates reflected a dip yesterday in line with the policy rate reduction to average 10.32% and 9.51% respectively. Liquidity remained at a net deficit of Rs. 1.2 b as the Central Bank refrained from conducting any OMO auctions for a fourth consecutive day.
In forex markets yesterday, the USD/LKR rate gained marginally by 20 cents to close the day at Rs. 128.65 as forward premiums narrowed. The total dollar/rupee volume for the previous day (10 December 2012) was US$ 45.08 million. Given are some forward dollar rates that prevailed in the market: one month – 129.60; three months – 131.70; and six months – 134.53.


COLOMBO, Dec 13 (Reuters) - Sri Lankan stocks rose for the fourth straight session on Thursday to nearly a one-month high, bolstered by a surprise rate cut by the central bank the previous day to support economic growth.

The Colombo Stock Exchange's main index closed 0.56 percent or 30.72 points firmer at 5,547.36, its highest close since Nov. 16. It jumped 1.42 percent in early trade.

The central bank reduced the repurchase rate and the reverse repurchase rate by 25 basis points to 7.50 percent and 9.50 percent respectively on Wednesday, lowering them from three-year highs.

'With rates coming down, investors are looking at the market again,' said a stockbroker.

Turnover stood at 702.28 million rupees ($5.46 million) Foreign investors were net sellers of 23.4 million rupees worth of shares. They have been net buyers of 36.56 billion rupees so far this year.

The rupee closed firmer at 128.40/50 to the dollar compared with Wednesday's close of 128.65/70 on exporter dollar conversion ahead of the holiday season, dealers said. ($1 = 128.7250 Sri Lanka rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sanjeev Miglani) Keywords: MARKETS SRILANKA/

( Messaging:

3Sri Lankan stocks extend gain on rate cut Empty Positive momentum continues Thu Dec 13, 2012 5:55 pm


Director - Equity Analytics
Director - Equity Analytics
By The Nation
Positive momentum continued into today’s trading with most blue-chips gaining ground. Retail participation gathered activity today on improved sentiment. Gains on Ceylon Tobacco Company helped to bolster the indices with relatively high activity seen on the normal board. Banking sector counters such as Sampath Bank, National Development Bank and Commercial Bank also gained ground. It should be noted that foreigners were net sellers on both yesterday and today.

ASI gained 30.72 points (0.56%) to close at 5,547.36, MPI gained 52.77 points (1.05%) to close at 5,063.96 and the S&P SL 20 index gained 29.74 points (0.99%) to close at 3,024.29. Turnover was Rs. 702.3Mn.

Top contributors to turnover were Ceylon Tobacco Company with Rs. 104.5Mn, Chevron Lubricants with Rs. 99.9Mn and National Development Bank with Rs. 54.1Mn. Most active counters for the day were HVA Foods, Central Investments & Finance and Blue Diamonds.

Notable gainers for the day were Sierra Cables up by 13.0% to close at Rs. 2.60, Tangerine up by 7.3% to close at Rs. 75.00 and The Finance non-voting up by 7.1% to close at Rs. 6.00. Notable losers for the day were PC House down by 5.6% to close at Rs. 5.10, Tess Agro down by 4.4% to close at Rs. 2.20 and asia Asset Finance down by 4.0% to close at Rs. 2.40.

Cash map for today was 63.22%. Foreign participation was 32% of total Market turnover whilst net foreign selling was Rs. 24Mn.


The Colombo bourse yesterday sustained its upward trend with a turnover of Rs.702.3 million, up from the previous day’s Rs.479.5 million, with all indices moving up tidily – the All Share by 30.72 points (0.56%), the Milanka by 52.77 points (1.05%) and S&P by 29.74 points (0.94%) with 131 gainers comfortably ahead of 94 losers while 86 counters closed flat.

Brokers said that sentiment was a little more positive with the Central Bank easing monetary policy on Wednesday adding that the market did better during early trading though easing off at close.

"The indices ended sharply higher on the back of further gains in a few large caps, but partially gave up intra day gains by market close. Improved activity levels were largely dominated by trades on CTC, LLUB, and banking counters," John Keells Stockbrokers said.

Foreign purchases amounted to Rs. 212.35 million but with heavy selling, a net outflow of Rs. 23.40 million was recorded.

Crossings in Chevron where two big parcels totaling 450,000 shares traded at Rs.200, up Rs.2 from the previous close, in deals worth Rs.90 million and Infrastructure Developers where 200,000 shares were crossed at Rs.135 contributing Rs.27 million to turnover were yesterday’s block trades.

Brokers said that the indices were well supported by Ceylon Tobacco which closed Rs.40 up at Rs.800 with over 0.1 million shares done between Rs.760 and Rs.800, a one year high for the counter, closing at Rs.799.90 generating a turnover of Rs.104.5 million.

JKH also saw over 0.1 million shares traded closing Rs.2.90 up at Rs.217.40 trading between Rs.215 and Rs.218 contributing Rs.30.1 million to turnover supporting the indices.

Other major trades included Sampath which closed Rs.9 up at Rs.200 on nearly 0.3 million shares done between Rs.192 and Rs.201 contributing Rs.51.3 million to the day’s business volumes and HNB which closed 40 cents up at Rs.141 on nearly 0.3 million shares traded between Rs.141.10 and Rs.143.50 generating a turnover of Rs.38.4 million.

Other most traded blue chips included Distilleries up Rs.3.40 to Rs.157.50 on over 0.2 million shares, Commercial Bank (non-voting) down a rupee to Rs.89.50 on nearly 0.2 million shares, Commercial Bank (voting) up Rs.1.10 to Rs.102.70 on over 0.1 million shares and 50,000 Chevron closing Rs.2 up on the floor at Rs.199.90.

Ceylon Theatres lost a rupee to close at Rs.124 on over 0.1 million shares and Asia Capital was up 20 cents to close at Rs.30.20 on 0.4 million shares.

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