daily economic outlook - assetline...daily economic outlook 14th july 2015 tel: +94 11 4700100 page...

DAILY ECONOMIC OUTLOOK 14th July 2015

Tel: +94 11 4700100 www.assetline.lk

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Snapshot - Monetary Sector

14-July-2015 13-July-2015 Chg.

Call 6.18 6.17

Repo 5.91 5.91 -

Over Night 6.18 6.17

Market

Liquidity(Bn.) 63.21 64.40

Daily Money Market Movement Daily Forex Movement

13-July-2015 10-July-2015 Chg.

01/04/2016 6.50% 6.50% -

15/05/2017 7.05% 7.05% -

01/06/2018 7.80% 7.75%

15/09/2019 8.20% 8.25%

01/08/2021 9.15% 9.10%

T-Bond selling rates T-Bill Rate Movement in Auction

Page 11 Page 10

Page 7

6.14

6.26 6.28

5.90

6.00

6.10

6.20

6.30

6.40

%

91-day 182-days 365-days

14-July-2015 13-July-2015 Chg.

USD 135.35 135.19

GBP 210.35 210.29

EUR 149.74 151.23

JPY 1.10 1.11

Against USD 14-July-2015 13-July-2015 Chg.

YUAN 6.21 6.21 -

INR 63.47 63.45

BDT 78.31 77.83

VND 21810 21814

5.7

5.8

5.9

6.0

6.1

6.2

6.3

61

62

63

64

65

66

08.07.2015 09.07.2015 10.07.2015 13.07.2015 14.07.2015

%

LKR

Bn

Market Liquidity Call Repo Over Night


Page 6

Page 7

Page 7

Page 7

Page 6

Snapshot – Commodities

1,619.5

1,648.0 1,652.0 1,658.5 1,652.5

1600

1650

1700

08-07-2015 09-07-2015 10-07-2015 13-07-2015 14-07-2015

Aluminium USD/Ton

57.44 57.52

59.17

57.53 56.81

54

56

58

60

08-07-2015 09-07-2015 10-07-2015 13-07-2015 14-07-2015

Brent – USD/barrel

52.12 52.25

53.22

52 51.15

50

51

52

53

54

08-07-2015 09-07-2015 10-07-2015 13-07-2015 14-07-2015

WTI - USD/barrel

5,370.0

5,571.0 5,561.0 5,605.0 5,502.0

5200

5400

5600

5800

08-07-2015 09-07-2015 10-07-2015 13-07-2015 14-07-2015

Copper USD/Ton

1,158.5 1,164.3

1,159.3 1,154.0

1,157.4

1140

1150

1160

1170

08-07-2015 09-07-2015 10-07-2015 13-07-2015 14-07-2015

GOLD

396.83 396.10 398.51

408.32 401.45

380

390

400

410

Week 22 Week 23 Week 24 Week 25 Week 26

All elevation Tea Auction Average Price (LKR)

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

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


Local News Bulletin for the Day

Secondary market bond yields increase to pre-rate cut levels

The upward trend in secondary market bond yields continued yesterday as well as yields were seen increasing to

levels last witnessed prior to the April 2015 policy rate cut, driven by the increase in primary market

averages. Read More

Rupee ends steady on state bank dollar sales

The rupee ended steady on Tuesday, a day after it depreciated 0.15%, as a state-owned bank maintained its dollar

selling rate at 133.80 amid demand for the greenback from importers, dealers said. “There was importer demand

but the state bank sold at 133.80,” a currency dealer said. Read More

Sri Lanka Litro to reduce gas prices: Can further reduce after exposing corruption

Sri Lanka’s state run, Litro Gas Lanka says it will reduce the prices of Litro Gas refills with effect from mid night,

today. “We are pleased to inform our customers that due to the new policies and procedures adopted, we have

obtained the necessary approval to reduce our prices of Litro Gas refills with effect from 15th July 2015.” Litro

Gas Lanka said in a notice to customers.

. Read More

Rubber price recovery delayed, says top Sri Lankan producer

Rubber prices are likely to remain low despite expectations of a recovery this year given slow global demand in

and surplus stocks with the collapse in crude oil prices, according to Sri Lanka’s biggest producer.

Kegalle Plantations said its rubber production fell 12 percent to 3,534 metric tons in 2014 from the year before and

that it accounts for about four percent of the island’s production. Read More

http://www.ft.lk/article/445673/Secondary-market-bond-yields-increase-to-pre-rate-cut-levels



http://www.ft.lk/article/445665/Rupee-ends-steady-on-state-bank-dollar-sales

http://www.ft.lk/article/423033/Janashakthi-Insurance--Plc-records-impressive-1Q

http://www.ft.lk/article/423033/Janashakthi-Insurance--Plc-records-impressive-1Q

http://www.lankabusinessonline.com/sri-lanka-litro-to-reduce-gas-prices-further-room-for-reduction-exposing-corruption/



http://www.economynext.com/Rubber_price_recovery_delayed,_says_top_Sri_Lankan_producer-3-2357-9.html




Global News Bulletin for the Day

Oil falls as Iran and world powers reach deal…….

• World powers and Iran reached deal on the nuclear agreement which could ease sanctions and improve exports

from Iran, this entailed oil prices to fall more than a dollar owning the facto of worsening global excess supply .

Analysts believe it would take sometime to improve the export capacity, however a small improvement in

exports could hit oil prices as Iran currently produces 2.5mn barrels per day above demand (Read more).

Greek privatization fund……

• One of the key terms of Greece's 86 billion euro ($95 billion) reform-for-aid package secured Monday is its

privatization "trust" fund into which Athens will transfer some 50 billion euros worth ($55 billion) of its

assets. The fund will be divided, with half of the 50 billion euro being used for bank recapitalisation, 25 percent to

be used to pay down debt and the remaining 25 percent will be reinvested in the Greek economy. (Read more).

• Euro zone industrial production slipped in May, data showed on Tuesday, against expectations of a slight rise,

suggesting that the area's economic recovery stalled in the second quarter after a solid start to the year.(Read

more).

Eurozone Industrial production falls in May……

http://www.cnbc.com/2015/07/13/oil-prices-tumble-as-iran-global-powers-reach-nuclear-deal.html



http://www.cnbc.com/2015/07/14/greeces-55b-privatization-fund-how-it-will-work.html



http://www.reuters.com/article/2015/07/14/us-eurozone-economy-production-idUSKCN0PO0U120150714




US T-Bills

US T-Bonds

Source: treasuries.gov

US Treasuries

0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.02 0.01 0.01 0.01 0.02 0.02 0.02 0.03 0.01 0.02 0.01

0.11 0.1 0.08

0.05 0.08 0.09 0.08 0.07 0.08

0.11 0.11 0.13

0.1 0.09 0.08 0.08 0.08 0.09 0.1 0.1

0.28 0.27 0.26 0.25 0.27

0.3 0.3 0.29 0.29 0.27 0.28 0.28

0.26 0.26 0.25 0.24 0.25 0.28 0.28 0.27

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

16-06-2015 18-06-2015 22-06-2015 24-06-2015 26-06-2015 30-06-2015 02-07-2015 07-07-2015 09-07-2015 13-07-2015

%

3 Months 6 Months 1 Year

1.10 1.06 1.03 1.03 0.99 1.06 1.07 1.06 1.06 1.09 1.00 1.01 1.08 1.01 0.95 0.96 0.91 0.95 1.04 1.07 1.03

1.71 1.68 1.63 1.65 1.59 1.68 1.71 1.69 1.70 1.75 1.62 1.63 1.70 1.64 1.56 1.55 1.50 1.58 1.68 1.71 1.67

2.36 2.32 2.32 2.35 2.26 2.37 2.42 2.38 2.40 2.49 2.33 2.35 2.43 2.40 2.30 2.27 2.22 2.32 2.42 2.44 2.41

3.09 3.06 3.09 3.14 3.05 3.16 3.20 3.16 3.16 3.25 3.09 3.11 3.20 3.19 3.08 3.04 2.99

3.11 3.20 3.21 3.20

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

15-06-2015 17-06-2015 19-06-2015 23-06-2015 25-06-2015 29-06-2015 01-07-2015 06-07-2015 08-07-2015 10-07-2015 14-07-2015

%

3 Years 5 Years 10 Years 30 Years


114.94

49.94

57.5

106.95

45.26

52.0

0

20

40

60

80

100

120

140

USD

/Bar

rel

Brent Oil WTI

*Latest Figures as at 14th July 2015 Source: Bloomberg

Iran reach deal with world

powers – pull oil prices down

back

Brent Oil and West Texas Intermediate (WTI)


Source: Investing.com, London Metal Exchange

back

7,150.5

5,561.0

0

1000

2000

3000

4000

5000

6000

7000

8000

May-14 Aug-14 Nov-14 Feb-15 May-15

USD

/To

n

Copper

2,081.8

1,903.3

1,652.0

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

65.4

54

56

58

60

62

64

66

68

70

2-Feb-15 2-Mar-15 2-Apr-15 2-May-15 2-Jun-15 2-Jul-15

USD

/Po

un

d

Cotton

1,192.0

1,159.3

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 price falls due to Chinese stock gyration

China poised to sell excess cotton stock, while India record bumper sowing, which is likely to keep cotton prices down

Copper, Cotton, Gold and Aluminium

Production continue to surge in China with adding

new smelting capacity

Gold fell on Monday as USD gained against EUR with

Greece receiving the bailout package

*Latest Figures as at 14th July 2015


Source: CBSL

back

6.14

6.26

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


Click to edit Master title style 6.17

5.91

0

2

4

6

8

10

12

14%

SLIBOR (1Month) Call Repo SDFR SLFR

CBSL reduced

policy rates by

50bps

Source: CBSL

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 June



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

Jul-

15

%

LKR

Bn

Net Liquidity Call Repo SDFR SLFR

Market Liquidity

Source: CBSL *Latest Figures as at 14th July 2015


Source: CBSL

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


LKR

149.3

182.6

142.5

0

20

40

60

80

100

120

140

160

180

200


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


LKR

LKR against USD, GBP, EUR & JPY

USD GBP

EUR JPY



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

77

78

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

Indian Rupee (INR) Bangladeshi Taka (BDT)

Vietnamese Dong(VND) Chinese Yuan (CNY)



Research Team

Sameera Siyabalape , CFA

(+94) 0774478524

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Uthpala Indrawansha

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Prashanthan Jeyavarman

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General Manager

Dimantha Kohombanwickramage

(+94) 0773778802

[email protected]

Our Team

Sales Team

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Suntharesan Kamalesan (+94) 0778112896 [email protected] Nandaguru Ambigaibalan

(+94) 0773544620

[email protected]

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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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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