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DAILY ECONOMIC OUTLOOK 14th July 2015
Tel: +94 11 4700100 www.assetline.lk
Page 2
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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
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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
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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
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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……
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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
Page 7
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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)
Page 8
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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
Page 9
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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
*Latest Figures as at 14th July 2015
Page 10
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
*Latest Figures as at 14th July 2015
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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
Page 12
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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
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
*Latest Figures as at 14th July 2015
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
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)
*Latest Figures as at 14th July 2015
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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