FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post


ADVERTISE
Poll

EXCHANGE RATE PREDICTION: 2022

 
 
 
 

View results

ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» SGH buys EXPO from retailers
by samaritan Today at 12:13 pm

» Buy lofc tomorrow - Maharaja
by ADVENTUS Today at 11:47 am

» US inflation eased slightly in July
by ADVENTUS Today at 11:25 am

» ACL; MELS; HHL; BIL; LWL- STOCKS TO WATCH
by ADVENTUS Today at 11:19 am

» LOFC Future
by ADVENTUS Today at 11:17 am

» Pakistan stocks surge on IMF Staff level agreement - CSE is warming up for the big run
by samaritan Today at 11:16 am

» LOLC FINANCE PLC (LOFC.N0000)
by Anushka Perz Today at 10:24 am

» L G I L - Maharaja special
by Chula Yesterday at 8:13 pm

» HAYLEYS PLC (HAYL.N0000)
by cseboss Yesterday at 11:34 am

» NO FURTHER INCREASE IN TAXES-PRES. RANIL WICKRAMASINGHE
by ADVENTUS Tue Aug 09, 2022 3:48 pm

» AAIC 100 = SCAP 16
by Equity Win Tue Aug 09, 2022 2:11 pm

» CARGO BOAT DEVELOPMENT COMPANY PLC (CABO.N0000)
by Dasun Maduwantha Tue Aug 09, 2022 12:10 pm

» Nestle‚ declares highest ever dividend
by Shiranli Tue Aug 09, 2022 11:24 am

» PRIME LANDS RESIDENCIES PLC (PLR.N0000)
by Anushka Perz Tue Aug 09, 2022 11:15 am

» MULTI FINANCE PLC (MFL.N0000)
by Eleven Mon Aug 08, 2022 9:28 pm

» AGSTAR PLC (AGST.N0000)
by Thushara Ayya Mon Aug 08, 2022 4:18 pm

» LIOC ....Get in soon
by samaritan Mon Aug 08, 2022 11:49 am

» Sinopec likely to enter Lankan fuel market
by samaritan Mon Aug 08, 2022 9:41 am

» RW - Rescue Warrior of Sri Lanka's Economy
by reyaz Mon Aug 08, 2022 8:17 am

» Should Central bank increase Interest rates?
by reyaz Mon Aug 08, 2022 7:52 am

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » ECONOMIC ADVANTAGE OCT'14

ECONOMIC ADVANTAGE OCT'14

2 posters

Go down  Message [Page 1 of 1]

1ECONOMIC ADVANTAGE OCT'14 Empty ECONOMIC ADVANTAGE OCT'14 Fri Oct 24, 2014 6:57 pm

RPPA


Expert
Expert

Executive Summary

Last week, global markets witnessed an episode of volatility with most equity and other asset classes declining largely on global growth concerns. Markets also saw a significant drive to safe haven assets such as U.S Treasuries resulting in those yields falling sharply. Though a global market risk such as this is in line with our overall concerns over the impact it would have on fund flows to emerging markets such as Sri Lanka, this recent round of volatility will be closely monitored to see if it will be short-lived or intensify further.

In early October, we revised both our rates and LKR against the USD view based largely on tightening global liquidity conditions and gradual pick up in domestic demand conditions. The strength of our base view has strengthened with our expectation increasing to 50% from the previous 40%.

In recent weeks, Sri Lanka has seen depreciatory pressure on the LKR against the USD. A key reason for this is the impact from the fall of around Rs. 32 billion in the foreign holdings component of government securities since August, bringing the % of Foreign Holdings below the threshold of 12.5%. Most emerging and frontier market currencies have also seen such depreciatory pressure against the USD in light of global liquidity tightening and a strengthening USD.

Hence to reiterate our change in the currency view made at the start of the month, with a 50% probability we expect a gradual depreciation of 3-5% in the LKR against the USD within the next 12 months, given that the USD continues to strengthen and the trend of outflows persists. However, within a 3 month horizon we feel that the CBSL would maintain the currency at current levels through selective intervention.

As mentioned in our report on the 7th of October, we expect domestic demand conditions to improve during the latter part of the year from sluggish growth seen in recent quarters. Private sector credit growth has begun to show signs of improvement with an increase of Rs. 47.7bn in absolute terms during August. As such, our view is that by the end of 12 months, Treasury bill yields would be at least 60 BPS points higher than current levels and Treasury bond yields would be at least 85 BPS higher than current levels. We also expect a slight tightening of Monetary policy by the CBSL during the first half of 2015 as emerging market liquidity pressures mount.

Since the change in our rates view on 7th October, the 12 Month T. Bill rates have increased between 30-40 BPS while the 4-Year bond has increased around 65 BPS. If further adverse conditions do continue globally, we could see our revised alternative scenario playing out. In this view we feel that T. Bonds will rise at least 135 basis points in the next 12 months from current levels. However, at this point our probability on this scenario remains at 20%.

In our focus of the month, we examine how the buildup of outstanding market liquidity could be reduced.

2ECONOMIC ADVANTAGE OCT'14 Empty Re: ECONOMIC ADVANTAGE OCT'14 Fri Oct 24, 2014 7:53 pm

indi009

indi009
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

from where did you get this??????????????//

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum