Financial Markets Unfiltered

S ometimes, no news can be good news. That is especially true for Sri Lanka's bond market. While big crashes or rallies make the headlines, what happened this week or what didn't may be more important to the country's economy. Source- bizenglish.adaderana.lk What Really Happened On August 19th, something unusual happened: the bond market was calm. Yields (the returns investors receive on government bonds) did not change significantly. The 2032 bond saw a slight increase, but most other bonds remained unchanged. People still traded about Rs. 7.56 billion worth of bonds, but nobody panicked or got overexcited. This muted day came ahead of a big government auction where the Central Bank was to borrow Rs. 78.50 billion through Treasury bills. Interestingly, this was Rs. 25 billion less than what it borrowed a week ago. Source- Daily FT                                             ...

HNB Assurance PLC, the insurance arm of HNB, has entered into a strategic partnership with the State Mortgage and Investment Bank (SMIB). This collaboration aims to deliver tailored life insurance products to SMIB’s extensive customer base as a landmark partnership in bancassurance. What is Bancassurance?                                                                                                                                        Source : LinkedIn A bank and an insurance company collaborate to offer insurance products or insurance benefits to the bank's customers. The bank will become the main po...

Have you ever scanned a QR code when you buy something? If you have already done this, you are already a part of digital banking. Nowadays, people's time has become a very valuable thing. Innovative mobile applications have evolved into online lending platforms. Technology is also advancing to the point of solving customer problems through chatbots. The reasons for the rapid spread of digital banking include the changing lifestyle of people during the COVID pandemic, the trend towards technology, the popularity of mobile applications with the advent of smartphones, and the introduction of projects like LankaQR and GovPay by the government. The impact this has had on people's lifestyles is so great that even small vendors selling on the side of the road are using these QR payment methods.   What is GovPay? On February 7, 2025, GOVPAY was introduced by ICTA. It was introduced in collaboration with fifty-two institutions and as of July, 7024 digital payment transactions ...

  Have you ever asked yourself why interest rates increase when the number of people who need to borrow money increases? The relevance of this question is particularly relevant now, as the nature of Sri Lanka’s bond yields, which are again on the rise, reflects growing borrowing needs among investors, inflation fears and uncertainty. The Loanable Funds (LFT) approach provides a simple and realistic description of how these interest rates are set not only by policy, but also by market forces in savings and borrowing. What is happening in Sri Lanka’s bond market? Sri Lankan government bond interest rates have increased in the past two weeks. Analysts say that two issues have contributed to this. Increased government borrowing due to fiscal policy and budget deficits Foreign investors withdrawing their investment from the market due to the discussions and excitement of debt restructuring. When government increases, the government has to pay to borrow funds, and to do so, the governmen...