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The NatWealth Group offers some of the best fixed income securities in Sri Lanka including Treasury Bills, Treasury Bonds, Repos and Sri Lanka Development Bonds.

Advantages of Dealing with NatWealth


Why NatWealth

Many are the advantages of dealing with a stable, trusted and reliable primary dealer in Sri Lanka like NatWealth Securities Limited.

  •    Competent Management
    With some of the best and most experienced industry professionals within our ranks, NatWealth assures you that the portfolio will be entrusted to a competent fund manager who will provide you with sound financial advice.

  •    Investment Planning
    At NatWealth, we will provide a customized solution for your investments and structure a portfolio to suit your particular requirement. Our fund managers will take in to consideration the purpose of the investment, time horizon, the liquidity aspect and more importantly the level of risk our client is willing to accept before we present you with an investment plan.

  •    Risk Management
    All investments with NatWealth Securities Limited are carried out within a framework of controlled risk management and good governance. All Front and Back Office Operations are kept independent of each other and a Compliance Officer ensures adherence to investment guidelines agreed between the client and NatWealth Securities Limited. The portfolio administration system software is geared to measure all risk exposures of portfolios and a Board Audit Committee monitors all risk management guidelines set out. The Board Risk and Investment Committee review the investment strategy with its returns and ensure effective management of the company’s risk exposure.

  •    Zero Costs of Intermediation and Administration
    The existence of the Primary Dealer unit gives rise to zero intermediation cost and this benefit is passed on to our clients. In addition to this, the responsibility of attending to portfolio administration matters pertaining to investments rest with NatWealth Securities Limited and you as our client, will be relieved of this burden.

  •    Reporting
    A comprehensive statement covering investment holdings, transactions and cash movements will be forwarded to you each month.

Investor Eligibility


Interested in investing in Treasury Bills, Treasury Bonds and other fixed income securities in Sri Lanka? These are the eligible Investors to purchase Government Securities in Sri Lanka.

  •    Corporate bodies incorporated in Sri Lanka
  •    Resident individuals
  •    Corporate bodies incorporate outside Sri Lanka
  •    Citizens of foreign states residing in Sri Lanka or outside Sri Lanka
  •    Sri Lankan Non-residents

 

Foreign Investments

Foreign investments have to be routed through a SECURITIES INVESTMENT ACCOUNT (SIA) maintained in a licensed commercial bank in Sri Lanka.


Eligible Investors

  •    Foreign Country Funds, Regional Funds or Mutual Funds.
  •    Institutions incorporated outside Sri Lanka
  •    Citizens of foreign states

Foreign Investors can purchase Government Securities through NatWealth Securities Limited at the weekly Treasury Bill auctions, periodic Treasury Bond auctions, or in the secondary market. Prevailing interest rates are market driven and are determined by key monetary, fiscal and other macro-economic factors. Our professionals will advise you regarding current interest rate trends and the most appropriate durations to invest.

Guidelines/Procedures to Participating Agents on the purchase and sale of SLDB's issued by the Government of Sri Lanka to foreign investors and non-resident Sri Lankans

Eligible Persons


The benefits that could be derived by investing / trading through NWS are as follows:

  •    Foreign institutional investors including country funds, regional funds or mutual funds.
  •    Corporate bodies incorporated in Sri lanka.
  •    Resident individuals.
  •    Citizens of foreign states whether residing in Sri lanka or outside Sri lanka.
  •    Nonresident sri lankans.
  •    Corporate bodies incorporates outside sri lanka.

 Foreign investments in T-Bills & T-Bonds have to be routed through a SECURITIES INVESTMENT ACCOUNT (SIA) to be maintained in a commercial bank within Sri Lanka.

  •    Eligible Investors

    1) Foreign Country Funds, Regional Funds or Mutual Funds.
    2) Institutions incorporated outside Sri Lanka
    3) Citizens of foreign states

  •    Foreign Investors are at liberty to purchase Government Securities at the weekly T- Bill auctions, periodic T-Bond auctions, or in the secondary market through NWS. The interest rates are market driven and are determined by key monetary, fiscal and other economic/political factors. We will advise you regarding current interest rate trends and the most appropriate durations to invest for.

Treasury Bills


A Treasury Bill is a transferable instrument and is issued at a discount and the face value is paid at maturity with interest paid up-front. An investor can buy Treasury Bills either directly from commercial bank or from licensed primary dealers in Sri Lanka such as NatWealth Securities Limited. A Treasury Bill is one of the safest and most liquid investment opportunity available in Sri Lanka since the interest and maturity proceeds are guaranteed by the Government and the investment is secure as there is zero default risk. What's more since you can discount the Treasury Bill at any time, it is almost like having cash in your hand!

Features of Treasury Bills in Sri Lanka

  •    Maturities of investments are for 91 days, 182 days and 364 days
  •    Issued at a discount and face value is paid at the maturity
  •    Yield rates are determined by the market
  •    Tradable instrument in the secondary market
  •    Can be used as collateral
  •    Issued in script-less form

Yield Curve

Treasury Bill Rates as at 17th October, 2018
Period Rate %
3 Months 9.48
6 Months 9.75
12 Months 10.44

Treasury Bonds


Treasury Bonds are safe medium and long-term debt instruments issued by the Government of Sri Lanka of which the maturity period ranges from 2 to 30 years. Treasury Bonds have zero default risk, since the payment of interest and maturity proceeds are guaranteed by the Government and no withholding tax is deducted from the earnings. Unlike a Treasury Bill, the holder of a Bond will be entitled to semi-annual periodic interest payments (coupon interest) paid at a pre-determined fixed rate during the life of the bond. Treasury Bonds purchased through NatWealth Securities Limited have the added guarantee of being reliable, safe and absolutely transparent.

 Features of Treasury Bonds in Sri Lanka

  •    Maturities are available between 2-30 years 
  •    No repayment risk - capital plus interest guaranteed by the Government of Sri Lanka  
  •    A fixed interest amount called "Coupon Interest" is paid every six months. This is calculated using the "Coupon Rate" 
  •    The investment is carried out using the "Yield Rate" which is market driven 
  •    Tradable instrument in the secondary market 
  •    Can be used as collateral 
  •    Issued in script-less form

Yield Curve

Treasury Bonds Rates as at 17th October, 2018
Period Rate %
One Year 10.40
Two Years 10.60
Three Years 11.10
Four Years 11.20
Five Years 11.35
Six Years 11.40
Seven Years 11.45
Eight Years 11.50
Nine Years 11.55
Ten Years 11.70

Repo/ Reverse Repo


A Repo or Reverse Repo (Repurchase Agreements & Reverse Repurchase Agreements) is an arrangement where a Primary Dealer like NatWealth Securities Limited comes to an agreement with a client to borrow or lend funds against Treasury Bills or Treasury Bonds at a fixed rate, for a predetermined period. With a Repo or Reverse Repo, you can invest or borrow money for interim periods ranging from one day to the maturity of the underlying Treasury Bill or Treasury Bond.

      Interest rates for Repos and Reverse Repos are determined by the supply and demand in the money market. These agreements are ideal to invest the excess funds on short-term basis at a higher interest rate than bank deposits. It is also cheaper to borrow funds on this agreement in an emergency. Treasury Bills or Treasury Bonds are used as collateral in Repo & Reverse Repo agreements. Therefore these agreements are safe as buying Treasury Bills/ Bonds outright.

 Features of the Repurchase / Reverse Repurchase Agreements in Sri Lanka

  •    Agreements can be for period as short as one day, or as long as T/Bill or T/Bond Maturity 
  •    Agreements may be discounted with the Primary Dealer, providing an exit window for the investor 
  •    Agreements are backed by Treasury Bills or Treasury Bonds 
  •    Lower borrowing cost
  •    Higher returns for idle short-term funds
Repurchase Agreements Rates as at 17th October, 2018
Period Rate %
Overnight 8.30
1 Week 8.60
2 Weeks 8.80
1 Month 9.00
3 Months 9.25
6 Months 9.50
12 Months 9.75

Sri Lanka Development Bonds (SLDB's)


Sri Lanka Development Bonds (SLDB's) are a debt instrument denominated in US Dollars issued by the Government of Sri Lanka in terms of the Foreign Loans Act, No.29 of 1957. Repayment is guaranteed by the Government of Sri Lanka.

Guidelines/Procedures to Participating Agents on the purchase and sale of SLDB's issued by the Government of Sri Lanka to foreign investors and non-resident Sri Lankans

FAQ


  1. What is a Treasury Bill / Treasury Bond?
    • Treasury Bills (T-bills):
      • Issued under the Local Treasury Bill Ordinance No. 8 of 1923 (as amended).
      • Available maturities of investments are for 91 days, 182 days and 364 days.
      • Issued at a discount and total proceeds including interest (face value) are paid at the maturity.
      • Yield rates are determined by the market.
      • Tradable instrument in the secondary market.
      • Issued in scriptless form.
    • Treasury Bonds (T-bonds):
      • Issued under the Registered Stock and Securities Ordinance No. 7 of 1937 (as amended). Maturities are available between 2-30 years.
      • It carries half yearly coupon payments and the principal is repaid at maturity.
      • Yield rates are determined by the market.
      • Tradable instrument in the secondary market.
      • Issued in scriptless form.
    • Repurchase (Repo ) / Reverse Repo facilities:
      • Repurchase - you can invest your money for any short-term period in Repos according to your investment requirement and earn interest
      • Reverse Repo. - By using your T-bills and T-bonds as collateral, you can get a loan for a short period at a low interest rate.
  2. What are the Benefits of Government Securities ?
    • It is an absolutely default risk free investment, since it is issued by the sovereign government. Hence, they are called gilt-edged securities.
    • You can get a higher rate of interest since the yield rates are determined in the market.
    • Since these bonds are tradable in the secondary market, you can obtain instant liquidity by selling them in the market.
    • All receipts of interest and maturity proceeds 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.
    • No stamp duty is payable on these bonds.
    • You can get the best service from the CBSL which maintains your investment in its state of the art, fully automated Central Depository System (CDS).
    • CDS will issue following statements to investors:
      • A monthly statement confirming the transactions that have taken place during the month.
      • Statement confirming the outstanding balance held by each investor semi annually.
      • A statement indicating the maturity proceeds and/or interest payment whenever such payments fall due.
  3. Eligible Investors to purchase Government Securities
    • Sri Lankans who have made their permanent residence overseas (Non-residents).
    • Citizens of Sri Lanka with dual citizenship in Sri Lanka and another country.
    • Sri Lankan professionals living in Sri Lanka or abroad who earn income in foreign currency.
    • Citizens of Sri Lanka who have taken up overseas employment or set-up businesses.
    • Banks acting in the fiduciary capacity on behalf of above categories.
2018-10-17     T Bill
3 Months  -  Buy 9.60%  Sell 9.40%  
6 Months  -  Buy 9.95%  Sell 9.75%  
12 Months  -  Buy 10.60%  Sell 10.40%  
2018-10-17     T Bill
3 Months  -  Buy 9.60%  Sell 9.40%  
6 Months  -  Buy 9.95%  Sell 9.75%  
12 Months  -  Buy 10.60%  Sell 10.40%