By Paneetha Ameresekere
Ceylon Finance Today: Foreign exodus from the government securities market (GSM) which was marginally reversed in the last two weeks ended 26 November, once more resumed in the following week (week ended Wednesday), with the market (Treasury (T) Bills and T Bonds) experiencing an exit of Rs 1,550 million (0.34% or US$ 11.76 million) worth of foreign funds, bringing foreign investments in the GSM down to Rs 458,271 million in the review week, available data showed.
Latest statistics showed that since end August to Wednesday (14 weeks), foreigners exited
Rs 43,147.74 million (US$ 327.25 million) worth of investments from the GSM, thereby causing depreciating pressure on the rupee.
Banks, currently operating under Central Bank of Sri Lanka's (CBSL's) moral suasion (MS) umbrella, saw the exchange rate (ER) close unchanged at Rs 131.85 to the US dollar in spot next next trades on Friday, while Treasuries also remained unchanged, they said.
However, a year ago, on 5 December, 2013, with inflows getting the better of outflows, complemented by the absence of MS then, the ER in 'spot' trades closed...
at Rs 130.85 to the dollar, a 0.8% depreciation since, records maintained by Ceylon FT showed.
Total GS outstanding as at Wednesday was Rs 4,075,798 million. Records also showed that since end August to Friday, the ER had sharply depreciated by between Rs 1.65 to Rs 1.62 (1.27%-1.24%) to Rs 131.85 to the dollar in interbank trading, caused by the dual effect of foreign funds departing from the GSM and import pressure. As at end August, the ER in spot trading was being transacted at Rs 130.20/23 to the dollar in two way quotes, in contrast, despite CBSL's MS lectures, it closed, down at Rs 131.85 to the dollar in interbank spot next next trading by the weekend.
"The exit from the GSM had its genesis, due to the recovery of the US economy (and an expected increase in rates), coupled with the low interest regime prevailing here," sources said.
According to invest.com, a web site, Indian T Bonds of a five year maturity was commanding a yield of 7.991% as at Friday, in contrast, Sri Lanka's five year Treasuries were fetching a yield of 6.70%, 291 basis points less than Indian Treasuries of a similar tenure.
Recovery of the US economy meant that foreigners prefer to invest in US assets, than, say in Sri Lankan assets, sources said. This has resulted in them exiting from the GSM.
Nevertheless, foreign exit from the GSM was temporarily halted in the two weeks ended 26 November, with the market experiencing a Rs 914.67 million (US$ 6.94 million) NFI during that fortnight, only to see this trend being reversed the following week, that is, the week closing Wednesday (3 December), latest data showed.
All dollar conversions have been made, based on 'spot next next' prices as at Friday obtained from the market.
www.ceylontoday.lk
Ceylon Finance Today: Foreign exodus from the government securities market (GSM) which was marginally reversed in the last two weeks ended 26 November, once more resumed in the following week (week ended Wednesday), with the market (Treasury (T) Bills and T Bonds) experiencing an exit of Rs 1,550 million (0.34% or US$ 11.76 million) worth of foreign funds, bringing foreign investments in the GSM down to Rs 458,271 million in the review week, available data showed.
Latest statistics showed that since end August to Wednesday (14 weeks), foreigners exited
Rs 43,147.74 million (US$ 327.25 million) worth of investments from the GSM, thereby causing depreciating pressure on the rupee.
Banks, currently operating under Central Bank of Sri Lanka's (CBSL's) moral suasion (MS) umbrella, saw the exchange rate (ER) close unchanged at Rs 131.85 to the US dollar in spot next next trades on Friday, while Treasuries also remained unchanged, they said.
However, a year ago, on 5 December, 2013, with inflows getting the better of outflows, complemented by the absence of MS then, the ER in 'spot' trades closed...
at Rs 130.85 to the dollar, a 0.8% depreciation since, records maintained by Ceylon FT showed.
Sources told Ceylon FT that part of these recent foreign exits, has been reinvested in the bourse. Data showed that since end August to Friday, the bourse has experienced a Rs 13.3 billion (US$100.9 million) net foreign inflow (NFI), still leaving a US$ 226.3 million net outflow, from local markets.
They further said that with possible polls bloodshed expected in the days to come, they therefore envisaged this foreign exodus to further increase.
Sri Lanka has allowed foreigners to invest up to 12.5% in GS outstanding, but, as at Wednesday, only 11.24% of this has been taken up, leaving a further 1.26 percentage points (Rs 51,203.75 million) worth GS outstanding, with no takers.
Sri Lanka has allowed foreigners to invest up to 12.5% in GS outstanding, but, as at Wednesday, only 11.24% of this has been taken up, leaving a further 1.26 percentage points (Rs 51,203.75 million) worth GS outstanding, with no takers.
Total GS outstanding as at Wednesday was Rs 4,075,798 million. Records also showed that since end August to Friday, the ER had sharply depreciated by between Rs 1.65 to Rs 1.62 (1.27%-1.24%) to Rs 131.85 to the dollar in interbank trading, caused by the dual effect of foreign funds departing from the GSM and import pressure. As at end August, the ER in spot trading was being transacted at Rs 130.20/23 to the dollar in two way quotes, in contrast, despite CBSL's MS lectures, it closed, down at Rs 131.85 to the dollar in interbank spot next next trading by the weekend.
"The exit from the GSM had its genesis, due to the recovery of the US economy (and an expected increase in rates), coupled with the low interest regime prevailing here," sources said.
According to invest.com, a web site, Indian T Bonds of a five year maturity was commanding a yield of 7.991% as at Friday, in contrast, Sri Lanka's five year Treasuries were fetching a yield of 6.70%, 291 basis points less than Indian Treasuries of a similar tenure.
Recovery of the US economy meant that foreigners prefer to invest in US assets, than, say in Sri Lankan assets, sources said. This has resulted in them exiting from the GSM.
Nevertheless, foreign exit from the GSM was temporarily halted in the two weeks ended 26 November, with the market experiencing a Rs 914.67 million (US$ 6.94 million) NFI during that fortnight, only to see this trend being reversed the following week, that is, the week closing Wednesday (3 December), latest data showed.
All dollar conversions have been made, based on 'spot next next' prices as at Friday obtained from the market.
www.ceylontoday.lk
No comments:
Post a Comment