Treasury Bill rate hikes notably as investors switch to govt. securities

By Hiran H.Senewiratne

CSE trading activities were of a negative nature from last morning due to the current political instability. Besides, the taking of short to medium term loans through Treasury Bills resulted in stock market investors switching to government securities, market analysts said. Last Tuesday the Treasury Bill rate increased significantly. It is said that the three- month weighted average yield rate increased by 32.1 per cent (403 basis points), six- month weighted average yield increased by 31.0 per cent (227 basis points) and one- year weighted average yield increased by 29.9 per cent (176 basis points). This affected the stock market, analysts said.

Amid those developments, shares continued to slip in mid-day trade yesterday after opening over 1-per cent weaker. The main All- Share Price Index slipped 47.4 points.The most liquid index was down 15.1 points. Turnover stood at Rs 625 million with two crossings.The crossings took place in JKH. which crossed 495,000 shares to the tune of Rs 60.4 million, its shares traded at Rs 122 and Galle Face Capital Partners two million shares crossed to the tune of Rs 38 million, its shares traded at Rs 90.

In the retail market, top seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 105.5 million (614,000 shares traded), Browns Investments Rs 63.8 million (8.7 million shares traded), JKH Rs 63.4 million (519,000 shares traded), Lanka IOC Rs 47.8 million (669,000 shares traded), LOLC Finance Rs 46.4 million (6.6 million shares traded), Kotagala Plantations Rs 15.4 million (3.6 million shares traded), Balangoda Plantations Rs 14.6 million (326,000 shares traded). During the day 44.5 million share volumes changed hands in 10000 transactions.

It is said that significant gains were recorded by Plantations sector counters. Although the tea yield is low, it fetches a big price due to rupee depreciations. Further, with the global economic downturn, it is said that there will be a big demand for Sri Lankan tea, stock market brokers said.Yesterday the US dollar exchange rate announced by the Central Bank was Rs 368.75. The rupee is being controlled and made stable by the Central Bank’s prudent monetary policies, it is believed.