SIA is a Sri Lankan Rupee (LKR) Account which eligible investors could open to invest in Government Securities (Treasury Bills and Treasury Bonds), Equity Capital of Companies incorporated in Sri Lanka and Units of Unit Trusts in Sri Lanka.
NOTE: Following LKR Accounts which were already opened for investment purposes will be re-named Securities Investment Accounts (SIA):
• Share Investment External Rupee Account (SIERA)
• Treasury Bond Investment External Rupee Account (TIERA 1)
• Treasury Bills Investment External Rupee Account (TIERA 2)
• Treasury Bonds and Bills Investment External Rupee Account – Deshabhimani for Sri Lankan Diaspora and Migrant Workers (TIERA-D)
Features and Benefits of Securities Investment Accounts (SIA)
• Remittances to the SIA would automatically be converted at the prevailing exchange rate to Sri Lankan Rupees (LKR) for investment.
• Not subjected to further taxation when investing in Government Securities, since a withholding tax of 10 percent of interest is charged at source.
• No exchange control regulations to repatriate original investment and any income realized (interest, maturity proceeds, sales proceeds of shares, dividend payments, liquidation proceeds of companies and proceeds of redemption of units) in any designated foreign currency to your overseas account.
• Ability to forward book foreign exchange to mitigate potential exchange rate risk.
• Transfer of funds between SIA of the same account holder is permitted.
• SIA maybe held jointly by eligible investors.
• Eligible investors who invest in Treasury Bonds/Treasure Bills are permitted to enter into Repurchase (Repo) and Reverse Repurchase (Reverse Repo) transactions using Treasury Bonds/Treasure Bills purchased under this scheme as collateral.
Who Can Open a SIA Account?
• Foreign institutional investors such as country funds, regional funds or mutual funds.
• Corporate bodies incorporated outside Sri Lanka.
• Citizens of foreign states, whether resident in Sri Lanka or outside Sri Lanka
• Non-resident Sri Lankans.
• Sri Lankan professionals living in Sri Lanka who receive inward remittances.
• Dual citizens who receive inward remittances.
What Deposits are Permitted to a SIA Account?
• Inward remittances received from abroad through banking channels.
• Transfer of funds from NRFC/FCBU/RNNFC accounts of the same account holder.
• Sale proceeds realised out of sale/transfer/maturity proceeds of Treasury Bonds/Treasury Bills or any income realised by way of capital gain thereof.
• Sale proceeds of share supported by documentary evidence (Broker's Contract Notes and evidence of tax payments, etc) and dividends.
• Dividend income on units of unit trusts net of tax supported by documentary evidence.
• Proceeds on redemption of units net of tax supported by documentary evidence.
• Commissions relating to share transactions with supporting evidence.
• Liquidations proceeds of companies.
• Interest received on Treasury Bonds held by the account holder.
• All other credits permitted on shares in terms of operating instructions No.06/02/12/2001 dated 06/11/2001 in respect of stock borrowings and lending (SBL) transactions.
• Local expenses incurred by account holder.
• Inward remittances for investments in debentures.
• Proceeds realized out of sale or transfer or maturity of debentures.
• Interest accrued on debentures.
What Withdrawals Can be Made to a SIA Account?
• Payments for investments in shares/units of unit trusts/Treasury Bonds/Treasury Bills.
• Outward remittances of sale/redemption/maturity/liquidation proceeds of shares/units/Treasury Bonds/Treasury Bills and dividends of shares or units.
• Payments to brokers, primary dealers, lead managers, management company of a unit trust and bank charges.
• Local expense payments in LKR of the account holder.
• Transfer of funds to the accounts maintained by the account holder at FCBU.
• All debits permitted in the operating instructions No.06/02/12/2001 dated 06/11/2001 in respect of SBL transactions on shares.
• Payments for investments in debentures.
Documents Required to Open a SIA Account?
For Individual Investors:
• Relevant mandate (duly completed).
• Photocopy of passport (relevant pages where photograph and personal details are available).
• Letter of introduction from your Banker overseas (required only from citizens of foreign states).
• Declaration from the customer.
• Central Depository System (CDS) Account Opening Form duly completed.
For Corporate Investors:
• A certified copy of the Certificate of Incorporation.
• Copy of Memorandum (as appropriate) and Articles of Association duly certified by the Chairman and Secretary.
• Certified extract of Resolution of the Board of Directors as stated in the Account Opening Form.
• Certified list of the Directors issued by the Registrar of Companies of the country where the Company is incorporated.
• Specimen signature cards of officials who are authorized to operate the account and copies of their passports duly witnessed by the Chairman/Secretary of the Company.
• Letter of Introduction from Institutions Banker overseas.
• Central Depository System (CDS) Account Opening Form duly completed.
See Also:
• How to Invest in Sri Lanka Government Securities - Treasury Bills and Bonds
• How to Invest in Sri Lanka Equity Market - Colombo Stock Exchange, the Best Performing Capital Market of the World
Showing posts with label bills. Show all posts
Showing posts with label bills. Show all posts
06 December 2010
01 June 2010
Sri Lanka Inflation down to 5.3pct, Long Term Treasury Bill Rates Up, Dollar Trades at 113.80/85
01st June 2010, www.island.lk, By Devan Daniel
The general level of prices increased 1.6 percent in May while the rate at which prices increase, or inflation, declined further to 5.3 percent during the month of May after reaching 6.9 percent in February, data from the Department of Census and Statistics showed.
The Colombo Consumers’ Price Index, the official inflation index in Sri Lanka, gained 1.6 percent to 215.9 points in May from 212.6 points the previous month. The annual average rate of inflation however continued to move upwards, reaching 3.6 percent.
A senior official of the Department of Census and Statistics said overall prices of goods represented in the CCPI increased 1.6 percent from April to May due to price increases of gas, flour, vegetables and fish.
"The heavy rains we experienced during the last weeks of May resulted in price increases for vegetables and fish," he said.
The Monetary Board of the Central Bank decided to hold policy rates steady at 7.50 percent and 9.75 percent for commercial bank overnight deposits and borrowings respectively with the Central Bank.
With inflation expected to be benign over the coming months, the Central Bank said there was still room for commercial banks to reduce their lending rates further and increase their lending in a bid to stimulate economic growth.
The credit stock to the private sector increased a marginal 0.1 percent in March to Rs. 1,235.4 billion from Rs. 1,234 billion in March 2009. Credit from the domestic banking sector increased 0.5 percent to Rs. 1,084.3 billion. Foreign sources accounted for credit amounting to Rs. 150.8 billion, a 2.4 percent decline from the previous year.
Net credit to the government declined by 6.9 percent to Rs. 655.2 billion from Rs. 704 billion a year ago. Credit to corporations increased by 84 percent to 96.9 billion from Rs. 52.6 billion.
However, analysts are worried that government borrowings could lead to inflationary pressure.
Public debt which was 86.2 percent of GDP in 2009, from 81.4 percent in 2008, has already expanded by 2.5 percent during the first two months of this year.
Dealers said rupee liquidity in the domestic market was still high at around Rs. 24 billion, and with relative quiet, the dollar was trading at around 113.80/85 yesterday.
With high levels of excess liquidity in the market, commercial bank appetite for government securities has not subsided.
At last week’s primary market auction to re-issue maturing Treasury bills amounting to Rs. 13 billion, bids came in for Rs. 18.3 billion. However, the Public Debt Department of the Central Bank accepted only Rs. 6.4 billion, rejecting the rest in a bid to control rates.
Rs. 6.5 billion was pumped into the system as the Public Debt Department paid off the maturing bills, for which re-issue bids had been rejected. Analysts said this was done by printing new money to this value, but the Central Bank said it has excess funds for this purpose.
If commercial bank confidence improves and more lending takes place, such liquidity injections could lead to inflation as consumption picks up.
Longer-term Treasury bill rates increased marginally last week.
The three-month Treasury bill rate fell marginally to 8.10 percent at last week’s auction from 8.13 percent a week ago. Rates on the six-month and 12-month bills increased marginally to 8.91 percent and 9.26 percent respectively from 8.88 percent and 9.23 percent a week before.
The general level of prices increased 1.6 percent in May while the rate at which prices increase, or inflation, declined further to 5.3 percent during the month of May after reaching 6.9 percent in February, data from the Department of Census and Statistics showed.
The Colombo Consumers’ Price Index, the official inflation index in Sri Lanka, gained 1.6 percent to 215.9 points in May from 212.6 points the previous month. The annual average rate of inflation however continued to move upwards, reaching 3.6 percent.
A senior official of the Department of Census and Statistics said overall prices of goods represented in the CCPI increased 1.6 percent from April to May due to price increases of gas, flour, vegetables and fish.
"The heavy rains we experienced during the last weeks of May resulted in price increases for vegetables and fish," he said.
The Monetary Board of the Central Bank decided to hold policy rates steady at 7.50 percent and 9.75 percent for commercial bank overnight deposits and borrowings respectively with the Central Bank.
With inflation expected to be benign over the coming months, the Central Bank said there was still room for commercial banks to reduce their lending rates further and increase their lending in a bid to stimulate economic growth.
The credit stock to the private sector increased a marginal 0.1 percent in March to Rs. 1,235.4 billion from Rs. 1,234 billion in March 2009. Credit from the domestic banking sector increased 0.5 percent to Rs. 1,084.3 billion. Foreign sources accounted for credit amounting to Rs. 150.8 billion, a 2.4 percent decline from the previous year.
Net credit to the government declined by 6.9 percent to Rs. 655.2 billion from Rs. 704 billion a year ago. Credit to corporations increased by 84 percent to 96.9 billion from Rs. 52.6 billion.
However, analysts are worried that government borrowings could lead to inflationary pressure.
Public debt which was 86.2 percent of GDP in 2009, from 81.4 percent in 2008, has already expanded by 2.5 percent during the first two months of this year.
Dealers said rupee liquidity in the domestic market was still high at around Rs. 24 billion, and with relative quiet, the dollar was trading at around 113.80/85 yesterday.
With high levels of excess liquidity in the market, commercial bank appetite for government securities has not subsided.
At last week’s primary market auction to re-issue maturing Treasury bills amounting to Rs. 13 billion, bids came in for Rs. 18.3 billion. However, the Public Debt Department of the Central Bank accepted only Rs. 6.4 billion, rejecting the rest in a bid to control rates.
Rs. 6.5 billion was pumped into the system as the Public Debt Department paid off the maturing bills, for which re-issue bids had been rejected. Analysts said this was done by printing new money to this value, but the Central Bank said it has excess funds for this purpose.
If commercial bank confidence improves and more lending takes place, such liquidity injections could lead to inflation as consumption picks up.
Longer-term Treasury bill rates increased marginally last week.
The three-month Treasury bill rate fell marginally to 8.10 percent at last week’s auction from 8.13 percent a week ago. Rates on the six-month and 12-month bills increased marginally to 8.91 percent and 9.26 percent respectively from 8.88 percent and 9.23 percent a week before.
21 May 2010
Sri Lanka Keeps Policy Rates & Treasury Yields Stable, Inflation Subdued
21st May 2010, www.island.lk, By Devan Daniel
The Monetary Board of the
Central Bank has decided to keep rates at which commercial banks lend or borrow from the Central Bank stable as inflation remains subdued while benchmark Treasury bill rates remained relatively stable this week with the bank financing the payment of maturing bills amounting to a little more than Rs. 1.5 billion.
The point-to-point change in inflation fell to 5.8 percent in April after reaching above 6 percent in March but the annual change in the rate of inflation moved up to 3.4 percent, raising since 3.1 percent last February.
"Price pressures in the economy have been dampened by improvements on the supply side, particularly the noteworthy performance in paddy production. Prices of key commodities in the international markets also remain subdued," the Central Bank said.
For these reasons, price pressures are expected to be subdued in the short term, the bank said in its monetary policy review for May.
Therefore, the Monetary Board of the Central Bank ahs decided to keep policy interest rates unchanged at 7.5 percent and 9.25. These rates apply to overnight placement of excess funds of commercial banks (repurchase rate) with the Central Bank and borrowings (reverse repurchase rate) form the Central Bank respectively.
The Central Bank said credit to the private sector had improved with positive growth for March 2010 after making negative gains since April last year, but no figures were given. The latest Weekly Economic Indicators published by the bank indicates a 2.8 percent drop in private sector credit last February from the previous year.
However, the Central Bank said credit to the private sector is picking up.
"The gradual expansion in credit obtained by the private sector indicates the solidifying recovery in the economy," it said.
However, the Central Bank earlier this month said that it was constantly asking commercial banks to revise their lending rates to more reasonable levels and that credit to the private sector was too slow to recover despite loosening monetary policy throughout the latter part of 2009.
Dealers said excess liquidity in the rupee market continued to be high. Dealers said the surplus reached Rs. 33 billion as at Wednesday. With commercial banks still cautious in their lending to the private sector, government securities were the preferred option.
Meanwhile, broad money growth fell to 17.1 percent year-on-year this March from 18.6 percent as at end 2009. "Broad money growth remains compatible with the levels targeted in the monetary programme at the beginning of the year," the Central Bank said.
Broad money is defined as the sum of currency held by the public and all deposits held by the public with commercial banks. This is a popular variable that is used to analyse the relationship between the money supply and the general price level, or inflation.
Treasury yields stable
Treasury bill rates remained relatively stable at this week’s primary market auction of maturing bills amounting to Rs. 13 billion. The Central Bank accepted re-issued Rs. 11,443 million of these financing the settlement of the balance Rs. 1,557 million with access funds held in its position.
The six-month and 12-month Treasury bill rates remained unchanged at 8.88 percent and 9.23 percent respectively from a week ago but the yield on the three-month bill increased marginally to 8.13 percent from 8.18 percent a week ago.
The Rs. 13 billion maturing bills attracted bids amounting to Rs. 24.62 billion from primary dealers but only Rs. 11.4 billion was accepted with the balance bought by the Central Bank. Analysts said this was done by printing new money but a top Central Banker said the bank has a stock of excess funds for this purpose.
IMF and budget deficits
The biggest risk to maintaining low inflation and low interest rates is from the budget deficit and Central Bank warned that the government would have to contain high deficits.
The IMF is expected to announce the fate of the US$ 2.6 billion standby facility programme today after it deferred the payment of the third US$ 326 million tranche earlier this year when the government overshot the 7 percent of GDP deficit target for 2009, reaching 9.8 percent.
The government announced that it would target a deficit of 7.5 percent this year which would be brought down to 5 percent by 2012, but the IMF said it would want to see the proof when the next budget is announced.
The next budget is to be announced in November for the 2011 fiscal year. An interim budget for this year is to be announced by the end of June.
Although Sri Lanka has built comfortable levels of foreign exchange reserves, more than US$ 5 billion, economists point out that the continuance of the IMF programme would give long term investors confidence in Sri Lanka’s macroeconomic prospects.
An IMF mission is in the island and is expected to complete its review of the standby facility programme today.
The Monetary Board of the
Central Bank has decided to keep rates at which commercial banks lend or borrow from the Central Bank stable as inflation remains subdued while benchmark Treasury bill rates remained relatively stable this week with the bank financing the payment of maturing bills amounting to a little more than Rs. 1.5 billion.The point-to-point change in inflation fell to 5.8 percent in April after reaching above 6 percent in March but the annual change in the rate of inflation moved up to 3.4 percent, raising since 3.1 percent last February.
"Price pressures in the economy have been dampened by improvements on the supply side, particularly the noteworthy performance in paddy production. Prices of key commodities in the international markets also remain subdued," the Central Bank said.
For these reasons, price pressures are expected to be subdued in the short term, the bank said in its monetary policy review for May.
Therefore, the Monetary Board of the Central Bank ahs decided to keep policy interest rates unchanged at 7.5 percent and 9.25. These rates apply to overnight placement of excess funds of commercial banks (repurchase rate) with the Central Bank and borrowings (reverse repurchase rate) form the Central Bank respectively.
The Central Bank said credit to the private sector had improved with positive growth for March 2010 after making negative gains since April last year, but no figures were given. The latest Weekly Economic Indicators published by the bank indicates a 2.8 percent drop in private sector credit last February from the previous year.
However, the Central Bank said credit to the private sector is picking up.
"The gradual expansion in credit obtained by the private sector indicates the solidifying recovery in the economy," it said.
However, the Central Bank earlier this month said that it was constantly asking commercial banks to revise their lending rates to more reasonable levels and that credit to the private sector was too slow to recover despite loosening monetary policy throughout the latter part of 2009.
Dealers said excess liquidity in the rupee market continued to be high. Dealers said the surplus reached Rs. 33 billion as at Wednesday. With commercial banks still cautious in their lending to the private sector, government securities were the preferred option.
Meanwhile, broad money growth fell to 17.1 percent year-on-year this March from 18.6 percent as at end 2009. "Broad money growth remains compatible with the levels targeted in the monetary programme at the beginning of the year," the Central Bank said.
Broad money is defined as the sum of currency held by the public and all deposits held by the public with commercial banks. This is a popular variable that is used to analyse the relationship between the money supply and the general price level, or inflation.
Treasury yields stable
Treasury bill rates remained relatively stable at this week’s primary market auction of maturing bills amounting to Rs. 13 billion. The Central Bank accepted re-issued Rs. 11,443 million of these financing the settlement of the balance Rs. 1,557 million with access funds held in its position.
The six-month and 12-month Treasury bill rates remained unchanged at 8.88 percent and 9.23 percent respectively from a week ago but the yield on the three-month bill increased marginally to 8.13 percent from 8.18 percent a week ago.
The Rs. 13 billion maturing bills attracted bids amounting to Rs. 24.62 billion from primary dealers but only Rs. 11.4 billion was accepted with the balance bought by the Central Bank. Analysts said this was done by printing new money but a top Central Banker said the bank has a stock of excess funds for this purpose.
IMF and budget deficits
The biggest risk to maintaining low inflation and low interest rates is from the budget deficit and Central Bank warned that the government would have to contain high deficits.
The IMF is expected to announce the fate of the US$ 2.6 billion standby facility programme today after it deferred the payment of the third US$ 326 million tranche earlier this year when the government overshot the 7 percent of GDP deficit target for 2009, reaching 9.8 percent.
The government announced that it would target a deficit of 7.5 percent this year which would be brought down to 5 percent by 2012, but the IMF said it would want to see the proof when the next budget is announced.
The next budget is to be announced in November for the 2011 fiscal year. An interim budget for this year is to be announced by the end of June.
Although Sri Lanka has built comfortable levels of foreign exchange reserves, more than US$ 5 billion, economists point out that the continuance of the IMF programme would give long term investors confidence in Sri Lanka’s macroeconomic prospects.
An IMF mission is in the island and is expected to complete its review of the standby facility programme today.
19 May 2010
Sri Lanka to Keep Rates on Hold, No Plans to Sell any Bonds Immediately
18th May 2010, www.bloomberg.com, By Shamim Adam
Sri Lanka’s benchmark int
erest rates will likely remain unchanged this week as inflation remains “benign,” central bank Governor Nivard Cabraal said in an interview in Singapore today.
“We will see a similar situation being maintained because inflation figures have been moderate, it’s been quite benign,” he said after speaking at an investment seminar. “We still have a little slack, so most probably monetary policy will remain at the level that it is.”
Sri Lanka’s policy makers are seeking to stoke growth after the end of a civil war in 2009. The central bank, which will release a policy statement on May 20, left the reverse repurchase rate unchanged at 9.75 percent last month, its lowest level since August 2005, and maintained the repurchase rate at 7.5 percent.
Consumer prices in the capital, Colombo, rose 5.8 percent in April from a year earlier, according to the statistics department. Inflation averaged 12.6 percent in the five years through 2009.
Peace in the South Asian nation is attracting tourists and investment, helping companies such as John Keells Holdings Plc, which has port, supermarket, hotel, property development and brokerage arms. Sri Lanka’s stock index is one of the world’s best performers in the past year.
The economy may expand more than 6 percent this year, Cabraal told investors today, supporting the central bank’s forecast for growth of 6.5 percent in 2010, the fastest pace in three years.
The island doesn’t plan to sell any bonds immediately and will review its funding options after the budget is unveiled, he added. The governor said last month Sri Lanka may sell more dollar-denominated bonds this year to fund its budget deficit.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
Sri Lanka’s benchmark int
erest rates will likely remain unchanged this week as inflation remains “benign,” central bank Governor Nivard Cabraal said in an interview in Singapore today.“We will see a similar situation being maintained because inflation figures have been moderate, it’s been quite benign,” he said after speaking at an investment seminar. “We still have a little slack, so most probably monetary policy will remain at the level that it is.”
Sri Lanka’s policy makers are seeking to stoke growth after the end of a civil war in 2009. The central bank, which will release a policy statement on May 20, left the reverse repurchase rate unchanged at 9.75 percent last month, its lowest level since August 2005, and maintained the repurchase rate at 7.5 percent.
Consumer prices in the capital, Colombo, rose 5.8 percent in April from a year earlier, according to the statistics department. Inflation averaged 12.6 percent in the five years through 2009.
Peace in the South Asian nation is attracting tourists and investment, helping companies such as John Keells Holdings Plc, which has port, supermarket, hotel, property development and brokerage arms. Sri Lanka’s stock index is one of the world’s best performers in the past year.
The economy may expand more than 6 percent this year, Cabraal told investors today, supporting the central bank’s forecast for growth of 6.5 percent in 2010, the fastest pace in three years.
The island doesn’t plan to sell any bonds immediately and will review its funding options after the budget is unveiled, he added. The governor said last month Sri Lanka may sell more dollar-denominated bonds this year to fund its budget deficit.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
03 May 2010
How to Invest in Sri Lanka Government Securities - Treasury Bills and Bonds
Sri Lanka Treasury Bills and Bonds attract foreign investors for a number of reasons. Prime among them are the stability of the booming economy of Sri Lanka and the higher interest rates offered on these government debt instruments compared to similar securities from other countries especially US and Europe. Sri Lanka Treasury Bills and Bonds are Tax Free as withholding tax is charged at source. Pl See: Current Rates on Treasury Bills and Bonds - Central Bank of Sri Lanka
What is a Treasury Bill?
Treasury bill is a short term debt instrument of 3, 6 or 12 Months issued by the Government of Sri Lanka. Treasury Bills are discounted instruments - the investor pays the discounted value (investment value) and receives the face value on maturity. Government issues Treasury Bills through weekly auctions and interest is decided based on the bids received.
What is a Treasury Bond?
Treasury Bond is a medium to long term debt instrument of 2 to 20 Years issued by the Government of Sri Lanka. Treasury Bond carries a coupon (interest) which is paid on a half yearly basis, and the principal is repaid on maturity.
What is Sri Lanka Development Bond?
Sri Lanka Development Bonds (SLDBs) are a debt instrument denominated in US Dollars issued by the Government of Sri Lanka. Interest is paid to the holder every six months and the principal repayment is made at the end of the maturity period. Calculation of interest payments will be based on the six month London Inter Bank Offered Rate (LIBOR) for USD per annum plus a margin determined through competitive bidding at the auction.
Who Issues Treasury Bills/Bonds?
As an Agent of the Government of Sri Lanka, the Public Debt Department of the Central Bank of Sri Lanka (CBSL) issues the Treasury bills and Treasury Bonds, and in the case of Treasury Bills repays maturity proceeds on maturity, and for Trasury Bonds pays interest on due dates and repays the principal on maturity.
Types of Government Securities
• Rupee Denominated Securitie
• Treasury Bills : Available to foreign investors, Sri Lankan diaspora living/working abroad and Sri Lankan citizens.
• Treasury Bonds : Available to foreign investors, Sri Lankan diaspora living/working abroad and Sri Lankan citizens.
• Inflation-linked Bonds : Available only to Sri Lankan citizens.
• Foreign Currency Denominated Securities
• Sri Lanka Development Bonds : Available to foreign investors, Sri Lankan diaspora living/working abroad and Specified Companies.
How to Invest in Government Securities?
Investors can purchase Treasury Bills/Bonds either from auctions in the primary market through a designated Primary Dealer (PDs) on specified dates, or from the secondary market through Primary Dealers, Commercial Banks or the Joint Lead Managers in the case of Sri Lankan Diaspora business on any week day.
Can I Invest in Treasury Bills/Bonds?
Yes, if you are one of the following,
a) Foreign institutional investors such as foreign country funds, mutual funds and regional funds.
b) Corporate bodies incorporated outside Sri Lanka.
c) Citizens of foreign states.
What are the Main Features of Treasury Bills?
• Risk free, gilt edged debt instrument
• Short term debt instrument (3 to 12 months)
• Maturity proceeds (Face value) will be paid on maturity
• Yield rates are determined by the market
• Tradable instrument in the secondary market
• Issued in scripless form
What are the Main Features of Treasury Bonds?
• Risk free, gilt edged debt instrument
• Maturities are available with 2-20 years
• It carries half yearly coupon payments and the principal is repaid on maturity
• Yield rates are determined by the market
• Tradable instrument in the secondary market
• Issued in scripless form
What Benefits Can I Derive by Investing in Treasury Bills/Bonds?
• It is an absolutely risk free investment, since it is issued by the sovereign government. Hence, they are called gilt-edged securities meaning that they are covered by gold.
• You can get the highest rate of interest since the yield rates are determined in the market.
• Since these bills/bonds are tradable in the secondary market, you can obtain instant liquidity by selling them in the market.
• All receipts of interest, maturity proceeds and capital gains are fully repatriable.
• You could also have a joint investment with some other person or persons. Hence, it is a very good way to share your investments with loved persons.
• You are not subject to further taxation, since a withholding tax of 10 percent is charged at source is the final tax.
• No stamp duty is payable on these bills/bonds.
• You can get the best service from the CBSL which maintains your investment in its state of the art, Scripless Security Settlement System and the fully automated Central Depository System (CDS).
What is the Availability of Treasury Bills/Bonds to a Foreign Investor?
• Foreign investors can purchase up to 10% of the total outstanding Treasury Bills or Bonds at any given time.
According to Central Bank data foreign investors held Rs 212 billion of bonds up from Rs 199 billion on January 04 2012. Treasury bills holdings rose to Rs 84.5 billion from Rs 70.1 billion in the same period there amid periodic changes.
How Can I Apply for Treasury Bills?
• You can purchase Treasury bills at any time through Primary Dealers (PDs) or Licensed Commercial Banks (LCBs) registered with the CBSL. PDs are the institutions appointed by the CBSL for trading in Government securities. Contact details of these institutions are given below.
• You can purchase Treasury bills by sending bids to the primary auctions through PDs or through direct placements.
• In order to make arrangement for fund transfers, you can advise your own bank to open a Rupee account named “Treasury bill Investment External Rupee Account - 2 (TIERA - 2)” in an LCB in Sri Lanka. (Note: Securities Investment Accounts (SIA) replace TIERA-2).
• After completing the transaction, your agent (LCB/PD) will open a security account for you in the CDS maintained by the CBSL. This account is debited /credited simultaneously based on your tradings in the market.
How Can I Apply for Treasury Bonds?
• You can purchase Treasury bonds at any time through Primary Dealers (PDs) or Licensed Commercial Banks (LCBs) registered with the CBSL. PDs are the institutions appointed by the CBSL for trading in Government securities. Contact details of these institutions are given below.
• You can purchase Treasury bonds from the secondary market or you can even send bids to the primary auctions through PDs.
• In order to make arrangement for fund transfers, you can advise your own bank to open a Rupee account named “Treasury bond Investment External Rupee Account (TIERA)” in an LCB in Sri Lanka. (Note: Securities Investment Accounts (SIA) replace TIERA).
• After completing the transaction, your agent (LCB/PD) will open a security account for you in the CDS maintained by the CBSL. This account is debited /credited simultaneously based on your tradings in the market.
What is Primary Market?
• Information on auctions for Treasury Bills and Treasury Bonds are normally announced in the leading newspapers at least two days prior to the auction date.
• Treasury Bond series available for foreigners are announced by the Public Debt Department via e-mail to all participants in the Central Depositary System.
• In the case of Treasury Bills, newspaper advertisements are published on every Monday and the auctions are held on Wednesdays. Bids are accepted through the fully automated online bidding system.
• Treasury Bills are issued weekly, while 3-4 Treasury Bond auctions are held every month based on the Government's cash requirement.
• All investors who are willing to participate in primary auctions should submit their bids through Primary Dealers before 11 a.m. on the auction date which is the Primary Dealer's deadline for submission of bids to auction. The successful bidders are informed within two hours of the deadline for the submission of bids. Press releases are published in leading newspapers on the following day.
• Settlement of successful bids in the primary market is on two business days after the auction date (T+2). Sri Lanka Government debt securities are scripless and therefore securities transfers take place on an electronic basis. Settlement is via the electronic payment system and the Real Time Gross Settlement System on a delivery vs. payment basis.
• Investors are required to maintain accounts with Commercial Banks or Primary Dealers for cash settlement for their transactions as well as for the crediting of coupon payments. Ownership of securities is recorded in the Central Depository System maintained by the Central Bank of Sri Lanka.
What is Secondary Market?
• An investor can either hold a tradable security until maturity or sell in the secondary market prior to maturity at the current market price.
• Investors can also buy tradable securities already issued to the market by the Central Bank of Sri Lanka.
• Primary Dealers/Commercial Banks quote buying and selling prices of Treasury Bills, Treasury Bonds daily for different maturities. Investors can shop around and bargain to obtain attractive market rates for these securities.
• Sri Lankan Government debt securities are scripless and the securities transfer is done on an electronic basis. In the Scripless Securities Settlement System (SSSS) transfer instructions are carried out on a trade-by-trade basis, with the transfer of securities and the transfer of funds for payment taking place simultaneously.
Who are Primary Dealers?
Primary Dealers are institutions appointed by the Central Bank of Sri Lanka for marketing government securities in the secondary market. Primary Dealers are also responsible for supporting the primary auction and are the major participants in the competitive bidding process. Primary Dealers are required to provide liquidity in the secondary market by quoting bid and offer yields for government securities.
How Can I Collect Maturity Proceeds?
• Interest (for Treasury Bonds) and Maturity proceeds (for both Treasury Bills and Bonds) relating to Treasury Bills/Bonds are credited on due dates directly to your account through your agent. The participants of the CDS are responsible to pay dues to you on due dates.
How do I Get More Information on Treasury Bills/Bonds?
• Details on available Treasury Bills and prevailing market rates can be obtained from LCBs, PDs and CBSL Website (www.cbsl.gov.lk)
• Details on current auctions can be obtained from PDs and LCBs.
• Any detail on this scheme can be obtained from the Public Debt Department of the CBSL.
Telephone: 94 11 2 477277 /212 /274//276 /278/316
Fax: 94 11 2477718/719/759
e-mail: pddrbw@cbsl.lk
List of Participating Agents - Licensed Commercial Banks (LCBs) and Primary Dealers (PDs)
• List of Licensed Commercial Banks (LCBs)
• List of Primary Dealers (PDs)
Market Information - Primary Market
• Last Treasury Bill Auction (Press Release)
• Last Treasury Bond Auction (Press Release)
• Treasury Bill Auction Historical Data (1996-2009)
• Treasury Bond Auction Historical Data (1997-2009)
Market Information - Secondary Market
• Two Way Quotes and Market Rates for Treasury Bills and Bonds. Please see latest Weekly Economic Indicators.
Additional Information on Treasury Bills and Treasury Bonds
• Available Treasury Bond Series
• Sri Lanka Development Bonds - Latest Issue
• Outstanding Government Debt Stock - Monthly Economic Indicators
• ‘LankaSecure’ - Scripless Securities Settlement System (SSSS) and CDS
• Exchange Rates
• Treasury Bills for Foreign Investors
• Treasury Bonds for Foreign Investors
• Treasury Bills and Bonds for Sri Lankan Diaspora
Related Info :
• Securities Investment Accounts (SIA) Replace SIERA & TIERA Accounts - For Investment in Sri Lankan Equity, Debt and Unit Trusts
• Sri Lanka Offers Special Visas to Investors, Professionals & Senior Citizens
What is a Treasury Bill?
Treasury bill is a short term debt instrument of 3, 6 or 12 Months issued by the Government of Sri Lanka. Treasury Bills are discounted instruments - the investor pays the discounted value (investment value) and receives the face value on maturity. Government issues Treasury Bills through weekly auctions and interest is decided based on the bids received.
What is a Treasury Bond? Treasury Bond is a medium to long term debt instrument of 2 to 20 Years issued by the Government of Sri Lanka. Treasury Bond carries a coupon (interest) which is paid on a half yearly basis, and the principal is repaid on maturity.
What is Sri Lanka Development Bond?
Sri Lanka Development Bonds (SLDBs) are a debt instrument denominated in US Dollars issued by the Government of Sri Lanka. Interest is paid to the holder every six months and the principal repayment is made at the end of the maturity period. Calculation of interest payments will be based on the six month London Inter Bank Offered Rate (LIBOR) for USD per annum plus a margin determined through competitive bidding at the auction.
Who Issues Treasury Bills/Bonds?
As an Agent of the Government of Sri Lanka, the Public Debt Department of the Central Bank of Sri Lanka (CBSL) issues the Treasury bills and Treasury Bonds, and in the case of Treasury Bills repays maturity proceeds on maturity, and for Trasury Bonds pays interest on due dates and repays the principal on maturity.
Types of Government Securities
• Rupee Denominated Securitie
• Treasury Bills : Available to foreign investors, Sri Lankan diaspora living/working abroad and Sri Lankan citizens.
• Treasury Bonds : Available to foreign investors, Sri Lankan diaspora living/working abroad and Sri Lankan citizens.
• Inflation-linked Bonds : Available only to Sri Lankan citizens.
• Foreign Currency Denominated Securities
• Sri Lanka Development Bonds : Available to foreign investors, Sri Lankan diaspora living/working abroad and Specified Companies.
How to Invest in Government Securities?
Investors can purchase Treasury Bills/Bonds either from auctions in the primary market through a designated Primary Dealer (PDs) on specified dates, or from the secondary market through Primary Dealers, Commercial Banks or the Joint Lead Managers in the case of Sri Lankan Diaspora business on any week day.
Can I Invest in Treasury Bills/Bonds?
Yes, if you are one of the following,
a) Foreign institutional investors such as foreign country funds, mutual funds and regional funds.
b) Corporate bodies incorporated outside Sri Lanka.
c) Citizens of foreign states.
What are the Main Features of Treasury Bills?
• Risk free, gilt edged debt instrument
• Short term debt instrument (3 to 12 months)
• Maturity proceeds (Face value) will be paid on maturity
• Yield rates are determined by the market
• Tradable instrument in the secondary market
• Issued in scripless form
What are the Main Features of Treasury Bonds?
• Risk free, gilt edged debt instrument
• Maturities are available with 2-20 years
• It carries half yearly coupon payments and the principal is repaid on maturity
• Yield rates are determined by the market
• Tradable instrument in the secondary market
• Issued in scripless form
What Benefits Can I Derive by Investing in Treasury Bills/Bonds?
• It is an absolutely risk free investment, since it is issued by the sovereign government. Hence, they are called gilt-edged securities meaning that they are covered by gold.
• You can get the highest rate of interest since the yield rates are determined in the market.
• Since these bills/bonds are tradable in the secondary market, you can obtain instant liquidity by selling them in the market.
• All receipts of interest, maturity proceeds and capital gains are fully repatriable.
• You could also have a joint investment with some other person or persons. Hence, it is a very good way to share your investments with loved persons.
• You are not subject to further taxation, since a withholding tax of 10 percent is charged at source is the final tax.
• No stamp duty is payable on these bills/bonds.
• You can get the best service from the CBSL which maintains your investment in its state of the art, Scripless Security Settlement System and the fully automated Central Depository System (CDS).
What is the Availability of Treasury Bills/Bonds to a Foreign Investor?
• Foreign investors can purchase up to 10% of the total outstanding Treasury Bills or Bonds at any given time.
According to Central Bank data foreign investors held Rs 212 billion of bonds up from Rs 199 billion on January 04 2012. Treasury bills holdings rose to Rs 84.5 billion from Rs 70.1 billion in the same period there amid periodic changes.
How Can I Apply for Treasury Bills?
• You can purchase Treasury bills at any time through Primary Dealers (PDs) or Licensed Commercial Banks (LCBs) registered with the CBSL. PDs are the institutions appointed by the CBSL for trading in Government securities. Contact details of these institutions are given below.
• You can purchase Treasury bills by sending bids to the primary auctions through PDs or through direct placements.
• In order to make arrangement for fund transfers, you can advise your own bank to open a Rupee account named “Treasury bill Investment External Rupee Account - 2 (TIERA - 2)” in an LCB in Sri Lanka. (Note: Securities Investment Accounts (SIA) replace TIERA-2).
• After completing the transaction, your agent (LCB/PD) will open a security account for you in the CDS maintained by the CBSL. This account is debited /credited simultaneously based on your tradings in the market.
How Can I Apply for Treasury Bonds?
• You can purchase Treasury bonds at any time through Primary Dealers (PDs) or Licensed Commercial Banks (LCBs) registered with the CBSL. PDs are the institutions appointed by the CBSL for trading in Government securities. Contact details of these institutions are given below.
• You can purchase Treasury bonds from the secondary market or you can even send bids to the primary auctions through PDs.
• In order to make arrangement for fund transfers, you can advise your own bank to open a Rupee account named “Treasury bond Investment External Rupee Account (TIERA)” in an LCB in Sri Lanka. (Note: Securities Investment Accounts (SIA) replace TIERA).
• After completing the transaction, your agent (LCB/PD) will open a security account for you in the CDS maintained by the CBSL. This account is debited /credited simultaneously based on your tradings in the market.
What is Primary Market?
• Information on auctions for Treasury Bills and Treasury Bonds are normally announced in the leading newspapers at least two days prior to the auction date.
• Treasury Bond series available for foreigners are announced by the Public Debt Department via e-mail to all participants in the Central Depositary System.
• In the case of Treasury Bills, newspaper advertisements are published on every Monday and the auctions are held on Wednesdays. Bids are accepted through the fully automated online bidding system.
• Treasury Bills are issued weekly, while 3-4 Treasury Bond auctions are held every month based on the Government's cash requirement.
• All investors who are willing to participate in primary auctions should submit their bids through Primary Dealers before 11 a.m. on the auction date which is the Primary Dealer's deadline for submission of bids to auction. The successful bidders are informed within two hours of the deadline for the submission of bids. Press releases are published in leading newspapers on the following day.
• Settlement of successful bids in the primary market is on two business days after the auction date (T+2). Sri Lanka Government debt securities are scripless and therefore securities transfers take place on an electronic basis. Settlement is via the electronic payment system and the Real Time Gross Settlement System on a delivery vs. payment basis.
• Investors are required to maintain accounts with Commercial Banks or Primary Dealers for cash settlement for their transactions as well as for the crediting of coupon payments. Ownership of securities is recorded in the Central Depository System maintained by the Central Bank of Sri Lanka.
What is Secondary Market?
• An investor can either hold a tradable security until maturity or sell in the secondary market prior to maturity at the current market price.
• Investors can also buy tradable securities already issued to the market by the Central Bank of Sri Lanka.
• Primary Dealers/Commercial Banks quote buying and selling prices of Treasury Bills, Treasury Bonds daily for different maturities. Investors can shop around and bargain to obtain attractive market rates for these securities.
• Sri Lankan Government debt securities are scripless and the securities transfer is done on an electronic basis. In the Scripless Securities Settlement System (SSSS) transfer instructions are carried out on a trade-by-trade basis, with the transfer of securities and the transfer of funds for payment taking place simultaneously.
Who are Primary Dealers?
Primary Dealers are institutions appointed by the Central Bank of Sri Lanka for marketing government securities in the secondary market. Primary Dealers are also responsible for supporting the primary auction and are the major participants in the competitive bidding process. Primary Dealers are required to provide liquidity in the secondary market by quoting bid and offer yields for government securities.
How Can I Collect Maturity Proceeds?
• Interest (for Treasury Bonds) and Maturity proceeds (for both Treasury Bills and Bonds) relating to Treasury Bills/Bonds are credited on due dates directly to your account through your agent. The participants of the CDS are responsible to pay dues to you on due dates.
How do I Get More Information on Treasury Bills/Bonds?
• Details on available Treasury Bills and prevailing market rates can be obtained from LCBs, PDs and CBSL Website (www.cbsl.gov.lk)
• Details on current auctions can be obtained from PDs and LCBs.
• Any detail on this scheme can be obtained from the Public Debt Department of the CBSL.
Telephone: 94 11 2 477277 /212 /274//276 /278/316
Fax: 94 11 2477718/719/759
e-mail: pddrbw@cbsl.lk
List of Participating Agents - Licensed Commercial Banks (LCBs) and Primary Dealers (PDs)
• List of Licensed Commercial Banks (LCBs)
• List of Primary Dealers (PDs)
Market Information - Primary Market
• Last Treasury Bill Auction (Press Release)
• Last Treasury Bond Auction (Press Release)
• Treasury Bill Auction Historical Data (1996-2009)
• Treasury Bond Auction Historical Data (1997-2009)
Market Information - Secondary Market
• Two Way Quotes and Market Rates for Treasury Bills and Bonds. Please see latest Weekly Economic Indicators.
Additional Information on Treasury Bills and Treasury Bonds
• Available Treasury Bond Series
• Sri Lanka Development Bonds - Latest Issue
• Outstanding Government Debt Stock - Monthly Economic Indicators
• ‘LankaSecure’ - Scripless Securities Settlement System (SSSS) and CDS
• Exchange Rates
• Treasury Bills for Foreign Investors
• Treasury Bonds for Foreign Investors
• Treasury Bills and Bonds for Sri Lankan Diaspora
Related Info :
• Securities Investment Accounts (SIA) Replace SIERA & TIERA Accounts - For Investment in Sri Lankan Equity, Debt and Unit Trusts
• Sri Lanka Offers Special Visas to Investors, Professionals & Senior Citizens
25 March 2010
Sri Lanka Treasury Bill Yields Move Up
25th March 2010, www.lankabusinessonline.com
Sri Lanka's 3-month Treas
ury bill yields moved up 05 basis points to 8.45 percent at Wednesday's auction, the government's debt office said. The 6-month yield moved up 05 basis points to 9.19 percent while the 12-month yield stayed flat at 9.47 percent.
The government's debt office said it sold 5.343 billion rupees of 3-month bills, 4.333 billion rupees of 6-month bills and 858 million rupees of 12-month bills.
The debt office, which is a unit of the Central Bank, said 534 million rupees of new bills were sold and 10 billion rupees of bills were rolled over at this week's auction.
It received bids worth 18 billion rupees.
Sri Lanka's 3-month Treas
ury bill yields moved up 05 basis points to 8.45 percent at Wednesday's auction, the government's debt office said. The 6-month yield moved up 05 basis points to 9.19 percent while the 12-month yield stayed flat at 9.47 percent.The government's debt office said it sold 5.343 billion rupees of 3-month bills, 4.333 billion rupees of 6-month bills and 858 million rupees of 12-month bills.
The debt office, which is a unit of the Central Bank, said 534 million rupees of new bills were sold and 10 billion rupees of bills were rolled over at this week's auction.
It received bids worth 18 billion rupees.
06 November 2009
Interest Rates in Treasury Bills Decline Further In Line with the Easing of the Monetary Policy by the Central Bank of Sri Lanka
6th November 2009, www.dailymirror.lk
The yield rates on Treasury Bills declined further at the primary auction held yesterday. The yield rate on Treasury bills with a maturity of 91 days declined by 36 basis points to 8.14 per cent, the lowest since May 2005. This trend was reflected in the yield rates of Treasury Bills with the maturities of 182 days and 364 days as well.
With this reduction, the primary market yield rates of Treasury Bills have declined by 906 - 938 basis points d
uring the past 12 month period. The secondary market Treasury Bill yield rates also continued on its decelerating path during this period.
In the meantime the primary and secondary market yield rates for Treasury Bonds also followed the same trend and declined by 843 - 1088 basis points during the past 12 month period while the extension of the yield curve upto the 6 year horizon was also witnessed during this period with the prudent public debt management strategies.
The reduction in yield rates observed during the recent past is in line with the gradual easing of the monetary policy stance by the Central Bank of Sri Lanka, increased foreign investor participation in the Government securities market, prevailing liquidity position in the market and positive view of the market on the deceleration of inflation rate.
The yield rates on Treasury Bills declined further at the primary auction held yesterday. The yield rate on Treasury bills with a maturity of 91 days declined by 36 basis points to 8.14 per cent, the lowest since May 2005. This trend was reflected in the yield rates of Treasury Bills with the maturities of 182 days and 364 days as well.
With this reduction, the primary market yield rates of Treasury Bills have declined by 906 - 938 basis points d
uring the past 12 month period. The secondary market Treasury Bill yield rates also continued on its decelerating path during this period.In the meantime the primary and secondary market yield rates for Treasury Bonds also followed the same trend and declined by 843 - 1088 basis points during the past 12 month period while the extension of the yield curve upto the 6 year horizon was also witnessed during this period with the prudent public debt management strategies.
The reduction in yield rates observed during the recent past is in line with the gradual easing of the monetary policy stance by the Central Bank of Sri Lanka, increased foreign investor participation in the Government securities market, prevailing liquidity position in the market and positive view of the market on the deceleration of inflation rate.
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