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DAILY ECONOMIC OUTLOOK 26th June 2015
Tel: +94 11 4700100 www.assetline.lk
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Snapshot - Monetary Sector
26-June-2015 25-June-2015 Chg.
Call 6.10 6.10 -
Repo 5.88 5.79
Over Night 6.11 6.12
Market
Liquidity(Bn.) 68.33 57.10
Daily Money Market Movement Daily Forex Movement
25-June-2015 24-June-2015 Chg.
01/04/2016 6.25% 6.25% -
15/05/2017 7.00% 7.00% -
01/06/2018 7.65% 7.65% -
15/09/2019 8.00% 8.00% -
01/08/2021 8.85% 8.82%
T-Bond selling rates T-Bill Rate Movement in Auction
Page 11 Page 10
Page 7
6.08
6.18
6.28
5.90
6.00
6.10
6.20
6.30
6.40
%
91-day 182-days 365-days
5.6
5.7
5.8
5.9
6.0
6.1
6.2
50
55
60
65
70
22.06.2015 23.06.2015 24.06.2015 25.06.2015 26.06.2015
%
LKR
Bn
Market Liquidity Call Repo Over Night
26-June-2015 25-June-2015 Chg.
USD 135.27 135.47
GBP 213.65 213.33
EUR 152.10 152.59
JPY 1.10 1.10 -
Against USD 26-June-2015 25-June-2015 Chg.
YUAN 6.21 6.21 -
INR 63.61 63.52
BDT 77.76 77.81
VND 21815 21837
USD LKR Premium 16-June-2015 05-June-2015 Chg.
1 Month 54/58 50/52
3 Months 170/175 150/160
6 Months 325/330 320/330
1 Year 650/660 625/640
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1,185.5
1,178.0 1,173.8 1,172.7 1,170.5
1160
1170
1180
1190
22-06-2015 23-06-2015 24-06-2015 25-06-2015 26-06-2015
Gold – USD/Ounce
5,645.5
5,723.0 5,764.5
5,715.0 5,730.0
5500
5600
5700
5800
22-06-2015 23-06-2015 24-06-2015 25-06-2015 26-06-2015
Copper USD/Ton
63.21
64.66 64.75
63.71 63.2
62
63
64
65
22-06-2015 23-06-2015 24-06-2015 25-06-2015 26-06-2015
Brent – USD/barrel
1,650.0
1,680.0 1,690.0
1,670.0 1,667.5
1600
1650
1700
22-06-2015 23-06-2015 24-06-2015 25-06-2015 26-06-2015
Aluminium USD/Ton
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60.21
61.14 61.25
60.11 59.51
58
59
60
61
62
22-06-2015 23-06-2015 24-06-2015 25-06-2015 26-06-2015
WTI - USD/barrel
394.49
396.78 396.83 396.10
398.51
390
395
400
Week 20 Week 21 Week 22 Week 23 Week 24
All elevation Tea Auction Average Price –LKR/Kg
54.20 53.47
51.70
54.30
51.86
50
52
54
56
Week 19 Week 20 Week 21 Week 22 Week 23
Weekly Average Coconut Price – LKR/Kg
279 282 285 296 305
50
150
250
350
12-05-2015 14-05-2015 21-05-2015 28-05-2015 03-06-2015
Rubber Price - Latex Crepe No.1 – LKR/Kg
Snapshot – Commodities
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Local News Bulletin for the Day
Secondary bond market witnesses week of considerable volatility
The secondary bond market witnessed a week of heavy volatility as yields were seen continuing its increasing
trend during the first half of the week ending 26 June, on the back of considerable foreign selling in Rupee bonds.
Yields on the liquid maturities of 1 June 2018, 1 May 2020, 1 August 2021, 1 July 2022, 1 September 2023 and 15
March 2025 was seen increasing to two month highs of 8.00%, 8.35%, 9.25%, 9.20%, 9.35% and 9.40%
respectively. Read More
Sri Lanka CB holds rates; says easy money, tax cuts boosting imports; state credit up
Sri Lanka's has held policy steady saying easy money and tax cuts are boosting imports and also noted that rising
credit to state and state owned enterprises are expanding money supply. Inflation was 0.2 percent in the 12-months
to May and the Central Bank is expecting year end inflation to be below 4.0 percent. "In this background, the
Monetary Board was of the view that the current monetary policy stance is appropriate," the June monetary policy
review said. The Central Bank said it was keeping policy rates at 6.00 percent to withdraw excess liquidity and
7.50 percent to inject liquidity. Read More
Guaranteed price recipe for poor quality, Sri Lanka tea trade warns
Sri Lanka’s tea trade has come out against a government guaranteed price scheme for tea leaves to help growers
cope with the slump in prices, saying it would only encourage poor quality tea. Anselm Perera, chairman of the
Colombo Tea Traders Association, said cultivators and black tea manufacturers should strive to improve quality at
a time of lower prices globally to attract more buyers to the island. Read More
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Global News Bulletin for the Day
Oil remains broadly flat……
• Oil prices steadied Friday and remained stuck in tight trading ranges as investors awaited the outcome of Iranian
nuclear talks which could lead to a big increase in Iranian crude exports (Read more).
Gold rose ahead of Greek talks……
• Gold rose on Friday ahead of crucial talks between Greek and its creditors building tension of possible default
and exit from Euro, while long term outlook for the metal was subdued by rising interest rates (Read more).
China stocks plunge……
• China's Shanghai Composite index crashed more than 7 percent on Friday leading to the biggest one-day loss in 5
months, amid increasing worries that the country's bull run is running out of steam. Risk-off sentiment from the
mainland also cast a shadow on regional bourses, which mostly ended in negative territory (Read more).
Greek credit extension declined……
• Talks between Greece and its creditors stalled on Saturday as bailout program expires on Tuesday. The rejection
of an extension piled huge pressure on Greek banks, which depend on central bank support to remain afloat, with
long lines forming in front of cash machines as people rushed to pull their money out while the banks were still
operating normally. (Read more).
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US T-Bills
US T-Bonds
Source: treasuries.gov
US Treasuries
0.97 0.94 0.99 1.02 1.07 1.04 1.13 1.09 1.12 1.15 1.12 1.12 1.10 1.06 1.03 1.03 0.99 1.06 1.07 1.06 1.06 1.09
1.51 1.49 1.55 1.61 1.69 1.65 1.75 1.72 1.74 1.80 1.74 1.75 1.71 1.68 1.63 1.65 1.59 1.68 1.71 1.69 1.70 1.75
2.13 2.12 2.19 2.27 2.38 2.31 2.41 2.39 2.42 2.50 2.39 2.39 2.36 2.32 2.32 2.35 2.26 2.37 2.42 2.38 2.40 2.49
2.89 2.88 2.94 3.02 3.11 3.03 3.11 3.11 3.15 3.22 3.11 3.1 3.09 3.06 3.09 3.14 3.05 3.16 3.20 3.16 3.16 3.25
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
28-05-2015 01-06-2015 03-06-2015 05-06-2015 09-06-2015 11-06-2015 15-06-2015 17-06-2015 19-06-2015 23-06-2015 25-06-2015
%
3 Years 5 Years 10 Years 30 Years
0.02 0.02 0.02 0.02 0.01 0.01 0.01 0.02 0.01 0.02 0.02 0.03 0.02 0.02 0.02 0.01 0.02 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
0.08 0.07 0.08 0.09 0.09 0.08 0.06 0.07 0.07 0.07 0.08 0.08 0.09 0.08
0.1 0.1 0.1 0.11 0.11 0.1 0.08
0.05 0.08 0.09 0.08 0.07 0.08
0.23 0.22 0.23 0.24 0.27 0.26 0.26 0.26 0.26 0.26 0.27
0.29 0.27 0.27 0.28 0.28 0.28 0.28 0.28 0.27 0.26 0.25
0.27 0.3 0.3 0.29 0.29
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
20-05-2015 26-05-2015 29-05-2015 03-06-2015 08-06-2015 11-06-2015 16-06-2015 19-06-2015 24-06-2015
%
3 Months 6 Months 1 Year
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114.94
49.94
63.7
106.95
45.26
60.1
0
20
40
60
80
100
120
140
USD
/Bar
rel
Brent Oil WTI
*Latest Figures as at 26th June 2015 Source: Bloomberg
U.S. gasoline stocks climbed
680,000 barrels to 218.49
million in the week to June 19
back
Brent Oil and West Texas Intermediate (WTI)
Greek crisis continues to exert
downward pressure on prices
Positive outcome from Iranian
nuclear talks could boost
Iranian crude exports
Page 8
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*Latest Figures as at 26th June 2015 Source: Investing.com, London Metal Exchange
back
7,150.5
5,730.0
0
1000
2000
3000
4000
5000
6000
7000
8000
May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15
USD
/To
n
Copper
2,081.8
1,903.3
1,667.5
0
500
1000
1500
2000
2500
May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15
USD
/TO
n
Aluminium
65.34
60.49
64.60
56
58
60
62
64
66
68
70
2-Feb-15 2-Mar-15 2-Apr-15 2-May-15 2-Jun-15
USD
/Po
un
d
Cotton
1,192.0
1,170.5
0
200
400
600
800
1000
1200
1400
1600
1800
2000
3-Jan-2012 3-Jan-2013 3-Jan-2014 3-Jan-2015
USD
/Ou
nce
Gold
Copper has fallen more than a third since 2012 as
supplies outpace demand
prices stable during cotton year (CY) 2015-16, according to rating agency ICRA.
Copper, Cotton, Gold and Aluminium
Production continue to surge in China with adding
new smelting capacity
Gold rose on Friday propelled by rising tension ahead of Saturdays Greek
talks
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*Latest Figures as at 26th June 2015 Source: CBSL
back
6.08
6.18
6.28
0
2
4
6
8
10
12
14
16
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
%
91 days 182 days 364 days
Treasury Bill Rates
0%
10%
20%
30%
40%
50%
60%
70%
0
10
20
30
40
50
60
70
80
90
100
LKR
Bn
Bids Received Amount Accepted Accepted/Received
Page 10
Click to edit Master title style 6.10
5.88
0
2
4
6
8
10
12
14%
SLIBOR (1Month) Call Repo SDFR SLFR
CBSL reduced
policy rates by
50bps
Source: CBSL *Latest Figures as at 26th June 2015
back
Call and Repo Rates Movement
CBSL removed
the restriction on
access to SDF
facility
Policy rate kept
unchanged in the
policy review
held in May
Page 11
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*Latest Figures as at 26th June 2015
back
0
2
4
6
8
10
12
-40
-20
0
20
40
60
80
100
120
140
160
Jan
-13
Feb
-13
Mar
-13
Ap
r-13
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
No
v-13
Dec
-13
Jan
-14
Feb
-14
Mar
-14
Ap
r-14
May
-14
Jun
-14
Jul-
14
Au
g-1
4
Sep
-14
Oct
-14
No
v-14
Dec
-14
Jan
-15
Feb
-15
Mar
-15
Ap
r-15
May
-15
Jun
-15
%
LKR
Bn
Net Liquidity Call Repo SDFR SLFR
Market Liquidity
Source: CBSL
Page 12
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Source: CBSL *Latest Figures as at 26th June 2015
back
110.6
135.3 132.4
134.6
0
20
40
60
80
100
120
140
160
1-Jan-2010 1-Jan-2011 1-Jan-2012 1-Jan-2013 1-Jan-2014 1-Jan-2015
LKR
213.3 221.2
208.4
0
50
100
150
200
250
1-Jan-2010 1-Jan-2011 1-Jan-2012 1-Jan-2013 1-Jan-2014 1-Jan-2015
LKR
149.3
182.6
142.5
0
20
40
60
80
100
120
140
160
180
200
1-Jan-2010 1-Jan-2011 1-Jan-2012 1-Jan-2013 1-Jan-2014 1-Jan-2015
LKR
1.3631
1.7023
1.1266
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
1-Jan-2010 1-Jan-2011 1-Jan-2012 1-Jan-2013 1-Jan-2014 1-Jan-2015
LKR
LKR against USD, GBP, EUR & JPY
USD GBP
EUR JPY
Page 13
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Source: Investing.com
back
63.62
61.66
63.59
60
60
61
61
62
62
63
63
64
64
65
77.48
77.93
77.81
77
77
77
77
78
78
78
78
21,165.0
21,595.0 21,800.0
20800
21000
21200
21400
21600
21800
22000
6.19
6.27
6.21
6.08
6.10
6.12
6.14
6.16
6.18
6.20
6.22
6.24
6.26
6.28
6.30
Regional Currencies against USD
*Latest Figures as at 26th June 2015
Indian Rupee (INR) Bangladeshi Taka (BDT)
Vietnamese Dong(VND) Chinese Yuan (CNY)
Page 14
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Research Team
Sameera Siyabalape , CFA
(+94) 0774478524
Uthpala Indrawansha
(+94) 0778813099
Prashanthan Jeyavarman
General Manager
Dimantha Kohombanwickramage
(+94) 0773778802
Our Team
Sales Team
Dilshan H Perera
(+94) 0775018604
Kasun Perera
(+94) 0772632584
Suntharesan Kamalesan (+94) 0778112896 [email protected] Nandaguru Ambigaibalan
(+94) 0773544620
Disclaimer : Information collected/analyzed is from sources believed to be reliable and from the Central Bank of Sri Lanka/Government of Sri Lanka. Assetline however does not warrant its completeness or accuracy. Opinions and estimates given constitute our judgment as of the date of the material and are subject to change without notice. The reports and presentations given are not intended as an offer or solicitation for the purchase or sale of any financial instrument. The recipient of this report must make their own independent decision regarding any securities or financial instruments mentioned here in. Securities or financial instruments mentioned may not be suitable to all investors.
Page 15
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Disclaimer
Disclaimer : Information collected/analyzed is from sources believed to be reliable and from the Central Bank of Sri Lanka/Government of Sri Lanka. Assetline however does not warrant its completeness or accuracy. Opinions and estimates given constitute our judgment as of the date of the material and are subject to change without notice. The reports and presentations given are not intended as an offer or solicitation for the purchase or sale of any financial instrument. The recipient of this report must make their own independent decision regarding any securities or financial instruments mentioned here in. Securities or financial instruments mentioned may not be suitable to all investors.
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