ECONOMYNEXT – Sri Lanka’s gilt yields rose Monday despite a 2.5 billion US dollar sovereign bond sale amid political uncertainly but stocks were up after markets opened following a seasonal holiday, dealers and brokers said.
The Colombo All Share Index was up 0.2 percent to 6,496 points in thin late morning trade, broker said.
Bond yields were higher.
A 5-year bond maturing 01.03.2023 quoted 9.95/10.00 percent Monday, up from 9.80/85 percent last Thursday.
A 10-year bond maturing on 01.09.2028 was quoted at 10.25/35 percent up from 10.10/15 percent last week.
Investors are watching Sri Lanka’s uneasy coalition between President Maithripala Sirisena’s Sri Lanka Freedom Party and Prime Minister Ranil Wickremesinghe’s United National Party.
At least 16 members of President Sirisena’s party is set to defect the opposition after they were effectively forced to resign for backing a failed no-confidence motion against the Prime Minister.
The central bank announced a 10 billion rupee cash injection after markets were short 12 billion rupees at the end of last week due a seasonal drawdown of cash.
On Monday overnight money was quoted at 7.90 percent. The central bank had printed about 64 billion rupees through for up to two weeks through reverse repo auctions at rates as low as 7.9 percent to accommodate a seasonal draw down of cash and keep rates below the 8.50 percent ceiling rate.
Cash will come back into the banking system in the last week of April.