Sri Lanka gilt yields plunge for second straight day, stocks up

Jan 03, 2013 (LBO) – Sri Lanka’s government bond yields plunged over 100 basis points over two days with active trading in four and five year maturities, and stocks closed up, dealers and brokers said. A 5-year bond maturing on 15 August 18 opened at 11.20/25 percent levels, moved to 11.35/45 then buying dropped 10.60/65 percent levels, on top of a drop from 11.80 percent to 11.25/30 percent levels Wednesday.

A 4 -year bond maturing on 15 July 2017 opened around 11.20/25 moved to 11.30/35 percent levels and closed at around 10.75/85 percent levels, dealers said. The maturity fell from 15 July 2017 to 11.25/20 levels Wednesday.

The bonds are plunging ahead of a 90 billion rupee bonds and coupons maturing on January 15, dealers said.

The public debt office had announced an auction of 5, 8 and 15-year bonds after a long pause.

Sri Lanka’s gilt yields started to fall in September 2012 but picked up again as pressure built up on the exchange rate again coinciding with several term auctions of cash into money markets.

The spot US dollar closed around 127.50/55 rupees, dealers said.

Stocks closed up 0.8 percent with the benchmark Colombo All Share Price Index ending the day at 5,730.45 up 46.6 points and the S&P SL 20 Index up 0.4 percent at 3,104.25.