NDB Securities Weekly Market Update 3 July 2015

The ASPI SL20 lost 0.13% whilst S&P SL20 recorded a gain of 0.37% for the week. The construction and engineering sector recorded the highest return for the week of 2.61% whilst the power and energy sector was the second highest, increasing by 1.11%. Meanwhile, the largest price gain was witnessed in Waskaduwa Beach Resort whilst Equity Two recorded the largest price loss. Foreigners remained active and closed as net sellers for the week.

The Central Bank of Sri Lanka (CBSL) was seen holding its policy rates steady at 6.00% and 7.50% for a second consecutive month at its monthly monitory policy announcement for June. In the weekly Treasury bill auction, the weighted average yields of 182 day bill rose for the first time since the policy rate cut in April to 6.21%. W. Avg. yield for 91 day bill increased after 3 weeks to 6.11% whilst W. Avg. yield for 364 day billl remained flat at 6.28%.

The outcome of the two Treasury bond auctions conducted on 02nd July 2015 resulted the yield gap between the primary market and secondary market to widen further. 01-05-2020 maturity and the 01-10-2022 maturity bonds were accepted with W. Avg. yields of 8.20% and 8.57% respectively against secondary market quotes for similar durations of 8.25/35% and 8.98/02%. For each of both bonds LKR 1 Bn was accepted even though the LKR 5 Bn was offered for each bond. Furthermore, in forex markets, the USD/LKR rate on spot contracts appreciated yesterday by 10 cents to LKR 133.60.
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