Sri Lanka rupee ends firmer; port strike dents importer dollar demand

Reuters: ** Sri Lanka's rupee ended slightly firmer on Thursday due to exporter dollar sales, while a trade union strike at customs dampened importer demand for the greenback. 

** Stocks snapped a five-session winning streak to end lower as foreign investors exited from risky assets. 

** A strike by Sri Lanka customs officers that left 6,000 containers stranded at the country's main port and put pressure on food prices, had dampened the demand for dollars from importers. 

 ** The rupee closed at 177.65/85 per dollar, compared with Wednesday's close of 177.70/178.00, market sources said. 

** Rupee posted a weekly gain of 2.8 percent last week as exporters converted dollars and foreign investors purchased government securities after a statement from the International Monetary Fund (IMF) and government's $1 billion debt repayment boosted confidence. 

** The currency has appreciated 2.8 percent so far this year. 

 ** Investor confidence in Sri Lanka is stabilising after the country repaid a $1 billion sovereign bond in mid-January, Central Bank of Sri Lanka Governor Indrajit Coomaraswamy said last week. 

 ** Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the county is struggling to repay its foreign loans, with a record $5.9 billion due this year, including $2.6 billion in the first three months. 

 ** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

** The political crisis had dented investor sentiment and delayed Sri Lanka's borrowing plans. Sri Lanka had plunged into political turmoil when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament. Wickremesinghe was later reinstalled as premier. A court ruled the dissolution was unconstitutional. 

 ** The Colombo Stock Index ended 0.04 percent firmer at 5,959.79 on Thursday, edging up from its lowest close since Jan. 23 hit on Wednesday. Stocks declined 1 percent in January. 

** Turnover was 797 million rupees ($4.49 million), less than last year's daily average of 834 million rupees. 

** Foreign investors net sold 685.1 million rupees worth shares on Thursday. They have been net sellers of 3.4 billion rupees worth of stocks so far this year, and 16.8 billion rupees since the political crisis began on Oct. 26, 2018. 

** The bond market saw inflows of 924.7 million rupees in the week ended Jan. 30, the latest central bank data showed. 

($1 = 177.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips)

Sri Lanka rupee ends firmer on exporter dollar sales

Reuters: ** Sri Lanka's rupee rose 0.3 percent on Wednesday due to exporter dollar sales, while a trade union action at customs dampened importer demand for the greenback. 

** Sri Lankan customs officers on Tuesday called off a strike that left 6,000 containers stranded at the country's main port and put pressure on food prices, after the government agreed to reinstate their boss for three months. The strike by thousands of officials began a week ago in protest at the sacking of Director General PSM Charles, who authorities blamed for a drop in customs revenue last year. 

** The rupee closed at 177.70/178.00 per dollar, compared with Tuesday's close of 178.20/50, market sources said. 

** Rupee posted a weekly gain of 2.8 percent last week as exporters converted dollars and foreign investors purchased government securities after a statement from the International Monetary Fund (IMF) and government's $1 billion debt repayment boosted confidence. 

** The IMF on Jan. 16 said it would resume discussions in February for further disbursal of part of a $1.5 billion loan. 

** The currency has appreciated 2.8 percent so far this year. 

** Investor confidence in Sri Lanka is stabilising after the country repaid a $1 billion sovereign bond in mid-January, Central Bank of Sri Lanka Governor Indrajit Coomaraswamy said last week. 

** Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the county is struggling to repay its foreign loans, with a record $5.9 billion due this year, including $2.6 billion in the first three months. 

** Fitch Solutions Macro Research, a subsidiary under Fitch Group, on Thursday downgraded its average forecast for the rupee to 186.00 per U.S. dollar for this year and 192.00 for 2020, from 177.00 and 183.00 respectively. ** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

** The political crisis had dented investor sentiment and delayed Sri Lanka's borrowing plans. Sri Lanka was plunged into political turmoil when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament. Wickremesinghe was later reinstalled as premier. A court ruled the dissolution was unconstitutional. 

** The Colombo Stock Index ended 0.41 percent weaker at 5,957.41 on Wednesday, its lowest close since Jan. 23. Stocks declined 1 percent in January, and ended lower for a fifth straight session. 

** Turnover was 249.2 million rupees ($1.40 million), less than a third of last year's daily average of 834 million rupees. ** Foreign investors net sold 6.8 million rupees worth shares on Wednesday. They have been net sellers of 2.8 billion rupees worth of stocks so far this year, and 16.1 billion rupees since the political crisis began on Oct. 26, 2018. 

** The bond market saw inflows of 924.7 million rupees in the week ended Jan. 30, the latest central bank data showed. ** For a report on global markets, click here . ** For a report on major currencies, click ($1 = 177.4000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez)

Sri Lanka rupee ends 1 pct weaker on importer dollar demand

Reuters: ** Sri Lanka's rupee ended 1 percent weaker on Tuesday, due to dollar demand as importers purchased the greenback after the local currency gained nearly 3 percent last week. 

** The rupee closed at 178.20/50 per dollar, compared with Friday's close of 176.60/177.00, market sources said. Markets were closed on the island nation's independence day on Monday. 

 ** Rupee posted a weekly gain of 2.8 percent last week as exporters converted dollars and foreign investors purchased government securities after an IMF statement and government's $1 billion debt repayment boosted confidence. 

** The International Monetary Fund (IMF) on Jan. 16 said it would resume discussions in February for further disbursal of part of a $1.5 billion loan. 

** The currency has appreciated 2.5 percent so far this year. 

 ** Investor confidence in Sri Lanka is stabilising after the country repaid a $1 billion sovereign bond in mid-January, Central Bank of Sri Lanka Governor Indrajit Coomaraswamy said last week. 

 ** Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the county is struggling to repay its foreign loans, with a record $5.9 billion due this year, including $2.6 billion in the first three months. 

 ** Fitch Solutions Macro Research, a subsidiary under Fitch Group on Thursday downgraded its average forecast for the rupee to 186.00 per U.S. dollar for this year and 192.00 in the next year, from 177.00 and 183.00 respectively. 

 ** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

** The political crisis had dented investor sentiment and delayed Sri Lanka's borrowing plans. Sri Lanka was plunged into political turmoil when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament. Wickremesinghe was later reinstalled as premier. A court ruled the dissolution was unconstitutional. 

 ** The Colombo Stock Index ended 0.01 percent weaker at 5,981.65 on Tuesday. It declined 1 percent in January. 

** Turnover was 401.5 million rupees ($2.26 million), less than half of last year's daily average of 834 million rupees. 

** Foreign investors net sold 260.8 million rupees worth shares on Tuesday. They have been net sellers of 2.7 billion rupees worth of stocks so far this year, and 16.1 billion rupees since the political crisis began on Oct. 26, 2018. 

** The bond market saw an inflows of 924.7 million rupees in the week ended Jan 30, the latest central bank data showed. 

($1 = 178.0000 Sri Lankan rupees) 

 (Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips)

Credit risks high in Sri Lankan banks: S&P

ECONOMYNEXT- Sri Lankan banks have high credit risks due to slow economic growth, high credit growth and lax lending standards, ratings agency Standard & Poor (S&P) said in a report.

"The Sri Lankan banking sector's resilience is weak and is affected by the country's low income levels, with an estimated per capita gross domestic product of about US$4,050 in 2018," it said.

"Credit risk is high, in our opinion, given relaxed lending and underwriting standards as well as evolving risk management practices," S&P said.

"The credit risk is accentuated by high growth in credit in the past and a recent slowdown in GDP growth."

Bad loans increased to 3.6 percent of total loans in September 2018 from 2.5 percent at the start of 2018.

Weather disruptions which affected agriculture and related industries, along with bank's aggressive growth increased bad loans, S&P said.

The ratings agency is expecting bad loans to grow and remain around 4.5-5 percent of total loans over the next 12-18 months due to slower economic growth.

S&P said local banking regulations and supervision is lower than international standards.

Disclosures by banks are low but improving, it said.

However, industry risk is stable, S&P said.

Sri Lanka Fitch rates DFCC's debt at 'AA-(lka)(EXP)'

ECONOMYNEXT - Fitch Ratings said it has assigned DFCC Bank's proposed Sri Lanka rupee-denominated senior debentures an expected National Long-Term Rating of 'AA-(lka)(EXP)'.

The notes, which will total 10 billion rupees and be listed on the Colombo Stock Exchange, will mature in five, seven and 10 years and carry fixed coupons, a statement said.

The bank plans to use the proceeds to support its loan expansion and to better manage its assets and liability mismatches.

The final rating is subject to the receipt of final documentation conforming to information already received, Fitch Ratings said.

“DFCC's National Long-Term Rating captures its developing commercial-banking franchise, relatively weak asset quality and earnings, and our expectation that DFCC would maintain higher capital buffers than similarly rated peers.”

The bank's senior debt ratings will move in tandem with its National Long-Term Rating, Fitch said.

“An inability to replenish its capital buffers to a level that is commensurate with its risk profile could pressure DFCC's National Long-Term Rating. Fitch sees limited upside for the bank's ratings due to its weak franchise.”

Sri Lanka’s 01-year Treasury yield down to 10.69-pct

ECONOMYNEXT – Sri Lanka’s one-year Treasury Bill yield edged down one basis point to 10.69 percent at Wednesday’s auction, according to data from the public debt department of the central bank.

It offered five billion rupees worth of 06-month bills but rejected bids of 6.8 billion rupees. The 03-month bills were not offered.

The public debt department accepted 21 billion rupees of 01-year bills, having offered bills worth 16 billion rupees and getting bids worth 52 billion rupees.

Sri Lanka’s Dipped Products December profits double amid capital gain

ECONOMYNEXT – Sri Lankan glove maker Dipped Products said net profit shot up 266 percent to 766 million rupees in the December 2018 quarter from a year ago, helped by gains from selling a stake in a tea extracting subsidiary.

Sales rose five percent to 22;5 billion rupees in the period, interim accounts filed with the stock exchange showed.

Quarterly earnings per share were 12.79 rupees. EPS in the nie months to December 2018 was 6.65 rupees with net profit doubling to 609 million rupees.

The stock closed unchanged at 91.10 rupees Wednesday.

The account showed a gain of 205 million rupees on the sale of a stake in a tea extraction subsidiary, Hayleys Global Beverages (Pvt) Ltd.. to Germany’s Martin Bauer Group.