Bourse continues to gain 4th day

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The Bourse which closed yesterday “moments” before UNP leader, acting President and Premier Ranil Wickremesinghe was elected as the new President by Parliament, continued to make sharp gains for the fourth consecutive market day, with the benchmark ASPI increasing by 393.84 points (5.38 per cent) to 7,712.08 points and the more sensitive S&P SL 20 Index by 140.59 points (6.02 per cent) to 2,477.81 points, respectively, in the review four day period.

Prior to yesterday, the last time market indices hit higher figures than “these” were 34 and 35 days ago on 16 June and 15 June 2022, where the ASPI and S&P SL 20 indices closed at7,705.27 and 2,485.21 points respectively.

Subsequently, shareholders were made richer by Rs 156.58 billion (4.92 per cent) to Rs 3.34 trillion in the four consecutive market days to yesterday. Meanwhile, the last time market indices made gains for four consecutive market days were during the period 21 June-24 June 2022, inclusive of both of those days  

In related developments, the market enjoyed a nominal net foreign inflow (NFI) of Rs 0.2 million yesterday, thereby reducing net foreign outflows that the bourse has suffered in the calendar year to date to Rs 682 million.  Yesterday was the fourth consecutive market day that the bourse enjoyed NFIs. The last time the bourse enjoyed NFIs for four consecutive market days or more was nearly three months ago where it enjoyed NFIs for eight consecutive market days from 4 April to 26 April 2022, inclusive of both days. Yesterday also saw 82.72 million shares changing hands on a Rs 1.34 billion turnover.

 ‘Spot’ Unchanged 13th Day

The benchmark, albeit administered market ‘spot’ closed   yesterday (Wednesday 20 July, 2022) to be trading unchanged for the thirteenth consecutive market day at Rs 360/364 to the US dollar in two way quotes, market sources told ‘Finance Today’. 

WAYs Fall, Yet 2nd Highest in Guided Auction

Weighted average yields (WAYs) at yesterday’s weekly Treasury (T) Bill auction fell across the board aided by a guided auction after their record highs the previous week in Sri Lanka’s 98-year old T-Bill history.

Subsequently, at yesterday’s auction, the WAYs of the 91, 182 and the benchmark 364 day maturities declined by 61, 104 and five basis points (bps) each to 31.50, 29.97 and 29.82 per cent respectively, yet recording the second highest WAYs across the board.

The fact that the WAYs of the shorter tenure 91-day maturity was higher than both the 182 and 364 day maturities and also the fact that the WAY of the 182 day maturity was greater than that of the 364 day maturity for the second consecutive week in both instances are indications that the market expects yield pressure to continue to the short term, discounting the “sharp haircuts” made in respect of the final sales of the 182 and 364 day tenures for the second consecutive market week to yesterday at this auction.

Consequently sales splits at yesterday’s auction comprised 181.10 per cent (Rs 45,276 million) of the 91-day maturity compared to its original offer of Rs 25,000 million made to the market; 1.53 per cent (Rs 230 million) of the 182-day maturity compared to its original offer of Rs 15,000 million and 63.29 per cent (Rs 9,494 million) of the 364 day maturity compared to its original offer of Rs 15,000 million, respectively. Subsequently, Central Bank of Sri Lanka (CBSL) the steward of Government of Sri Lanka (GoSL) debt sold the total parcel of Rs 55 billion offered across the board at yesterday’s auction.

By Paneetha Ameresekere