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Sri Lanka Equity Forum » Stock Market Talk » Boom - Boom - CFVF/CSEC/ESL - Secondary bond markets remain bullish ahead of weekly bill auction

Boom - Boom - CFVF/CSEC/ESL - Secondary bond markets remain bullish ahead of weekly bill auction

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bandara 123


Manager - Equity Analytics
Manager - Equity Analytics
Published : 2:56 am  October 1, 2014 -  WWW.FT.LK

By Wealth Trust Securities

Boom - Boom - CFVF/CSEC/ESL - Secondary bond markets remain bullish ahead of weekly bill auction <a href=Boom - Boom - CFVF/CSEC/ESL - Secondary bond markets remain bullish ahead of weekly bill auction Cinv_110" />


The speculation on the outcome of today’s Treasury bill auction in line with the new monetary policy conditions saw secondary market bond yields dip further yesterday amidst considerable volumes changing hands. Furthermore, Inflation for the month of September reflected a drop on its annualised average for a 16th consecutive month to 4.2% while its point to point remained unchanged at 3.5%. Activity was seen spreading across the yield curve, as considerable buying interest on the belly end of the curve saw the four-year maturities of 2018s (i.e. 1 April 2018, 15 July 218 and 15 August 2018) dip to intraday lows of 6.40%, 6.50% and 6.48% respectively while the seven year maturity of 1 May 2021 was seen changing hands within the range of 7.00% to 7.08%, the eight year maturity of 1 July 2022 within 7.15% to 7.20%, the nine and a half year maturity of 1 January 2024 within 7.42% to 7.45% and the 15 year maturity of 1 May 2029 at 8.60%.

At today’s weekly Treasury bill auction, a total amount of Rs. 6 billion will be on offer with Rs. 1.5 b on the 182 day maturity and Rs. 4.5 b on the 364 day maturity. At last week’s auction, the weighted average on the 364 day maturity dipped below 6.00% for the first time in history to record 5.89%, reflecting a drop of 37 basis points while all bids received for the 182 day maturity were rejected while the 91 day maturity was not on offer.

In money markets yesterday, the continued high surplus liquidity of Rs. 71.25 billion saw overnight call money and repo rates decreasing further to average at 5.77% and 5.59%.



Rupee dips considerably on spot next contracts

The rupee on spot next contracts dipped considerably by around 45 cents yesterday to hit an intraday low of Rs. 131.00 in comparison to its previous day’s closing levels of Rs. 130.45/55 on the back of importer led demand and portfolio outflows in equity and Government securities. The total USD/LKR traded volume for 29 September was at $ 61.65 million.

Some of the forward dollar rates that prevailed in the market were: one month – 131.05; three months – 131.58; and six months – 132.43.

CSE1

CSE1
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Arrow

RPPA


Expert
Expert
Members


Refer the following & see where we are heading,

Boom - Boom - CFVF/CSEC/ESL - Secondary bond markets remain bullish ahead of weekly bill auction Inflat11


So imagine what will be the future of above stocks.

Laughing Laughing Laughing Laughing Laughing Laughing Laughing Laughing Laughing Laughing Laughing

CSE1

CSE1
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
where is boom boom ?

EPS

EPS
Expert
Expert
All signs are good for CFVF, CSEC & ESL. Massive benifits from Treasury Bill, Treasuru Bond, Interest Rates reduction. Rates possible for further down.
Inteligent Investors will collect thease stocks gradualy. Now 2nd quarter is end. Quarterly Accounts will publish with in another 30 - 45 days. I expect CFVF will lead and pass the 70+ barrier during this period. If huge buying presure created, possible above 80 or 90 for CFVF. ESL & CSEC will follow CFVF.



Last edited by EPS on Thu Oct 02, 2014 8:57 am; edited 1 time in total (Reason for editing : update)

schemer


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
I have not studied economics.so I have some confusion about bond and bills.
they say if you invest in bond and bills for a certain interest rate and if interest rate falls later you get a huge capital gain. I have invested in bills thru com bank. I get only my initial capital and agreed interest for the whole period at the end of the maturity . I do not get any capital gains even if interest rate falls to zero.

please, can any expert in bills and bonds  explain how  can I get a capital gain if interest rate falls? still I cannot understand how it happens.

RPPA


Expert
Expert
@schemer wrote:I have not studied economics.so I have some confusion about bond and bills.
they say if you invest in bond and bills for a certain interest rate and if interest rate falls later you get a huge capital gain. I have invested in bills thru com bank. I get only my initial capital and agreed interest for the whole period at the end of the maturity . I do not get any capital gains even if interest rate falls to zero.

please, can any expert in bills and bonds  explain how  can  I get a capital gain if interest rate falls? still I cannot understand how it happens.

It is like this.

You buy at say 1 yr bill @ 6%. To make a capital gain you have to sell it at a lower rate.

When tenor is higher cap gains are higher when you sell at a lower rate. So for T/Bills say over 5 yr Bond U can make bigger capital gains than T/Bills.

RPPA


Expert
Expert
@RPPA wrote:
@schemer wrote:I have not studied economics.so I have some confusion about bond and bills.
they say if you invest in bond and bills for a certain interest rate and if interest rate falls later you get a huge capital gain. I have invested in bills thru com bank. I get only my initial capital and agreed interest for the whole period at the end of the maturity . I do not get any capital gains even if interest rate falls to zero.

please, can any expert in bills and bonds  explain how  can  I get a capital gain if interest rate falls? still I cannot understand how it happens.

It is like this.

You buy at say 1 yr bill @ 6%. To make a capital gain you have to sell it at a lower rate.

When tenor is higher cap gains are higher when you sell at a lower rate. So for T/Bills say over 5 yr Bond U can make bigger capital gains than T/Bills.

There some sophisticated calculations involved in this. When Coupons are coming in.

stockback


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
ESL moving very nicely. again two Rs down and next few days another 4-5 Rs pick.

completely moving according to RSI.

we are in bull market in that case RSI can move 60-85

I think another two rs down from next couple days that would be very good for ESL RSI

RPPA


Expert
Expert
As i told all to sell their trading quantities at these levels.  There will be red light for credit purchased ones.

Tomorrow onwards there should be some correction on these stocks.

BOOM BOOM AFRIDI failling for a short while for sure.

Get prepared buy at lowwwwwwwwwwwww BY REALISING gains

stockback


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
its difficult go up with high RSI. I think there is very strong support at 51 level I don't think further going down.
we will see

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