IMF uplifts bourse

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The bourse, buoyed by the triple effects of an investor-friendly Interim Budget presented by President and Finance Minister Ranil Wickremesinghe on Tuesday, “further” U.S. outreach to Sri Lanka and the possibility of an IMF programme becoming a reality was complemented by the market enjoying a total net foreign inflow (NFI) figure for the calendar year to date only for the second time for the year yesterday, data showed.

Yesterday it enjoyed an NFI figure of Rs 422.5 million in the calendar year to date backed by an NFI of Rs 697.4 million enjoyed yesterday. Prior to yesterday, the only other time for the year to date that the bourse enjoyed NFIs were on the first trading day of the year, 3 January 2022, with a figure of Rs 12.9 million.

It was announced, “‘The IMF Mission in Colombo has been extended by one day because discussions are still ongoing with the authorities. We plan to conclude the mission and issue a press release on Thursday 1 September.’ Peter Breuer, Senior Mission Chief for Sri Lanka, and Masahiro Nozaki, Mission Chief for Sri Lanka.”

Subsequently, the bourse sharply gained yesterday’s trading, with the ASPI hitting an eight calendar day high by increasing by 2.32 per cent to 9071.32 points and the S&P SL 20 Index a seven calendar day high by being upped by 2.31 per cent to 2,928.97 points, on an eight-day high turnover of Rs 4.26 billion on a 134.83 million share volume.

WAYs on record highs

Weighted average yields rose for the second consecutive week to yesterday, with yesterday’s increases alone being by 238, 177 and 67 basis points to record highs of 32.89, 31.28 and 30.50 per cent each, week-on-week (WoW)  in respect of the 91,182 and  the benchmark 364-day maturities at the Treasury (T) Bill auction, driven by record high inflation. Prior to yesterday, the records for the 91, 182 and 364-day maturities were established on 12 July with values of 32.11, 31.01 and 29.87 per cent, respectively.

Meanwhile, Colombo inflation was registered at a record high of 64.3 per cent last month and islandwide, also at a record high of 52.4 per cent in July, according to latest official data. Further, the fact that the WAY of the shorter maturity (91-day) was greater than that of the other two longer maturities, apart from the fact that yesterday’s auction, like all other auctions in recent times was also a guided auction,  shows that yield pressure rests  in the “short” terms.

Central Bank, steward of Government debt, sold 73.38 per cent (Rs 49,531 million) of the Rs 67,500 million parcel, the splits being 91 days 157.08 per cent (Rs 43,197 million) from Rs 27,500 million, an indication of the Government’s short-term borrowing appetite, 182-day, 14.54 per cent (Rs 2,908 million) and 364-day, 17.13 per cent (Rs 3,426 million) from a total of Rs 20,000 million offered for each of these two parcels.

By Paneetha Ameresekere