Bearish sentiment in bond market continues

• Foreign holding in rupee bonds increases
• Rupee dips marginally

By Wealth Trust Securities

The bearish sentiment in the secondary bond market continued during the week ending 9 September as most market participants persisted to be on the side lines.

This sentiment was seen affecting the weekly Treasury bills auction as only Rs. 10.27 billion was accepted in total against its total offered amount of Rs. 75 billion at its 1st phase of the auction. Nevertheless, a further amount of Rs. 38.14 billion was taken up from its 2nd phase of the auction at its weighted averages of 32.89%, 31.28% and 30.50% on the 3 month, 6 month and 1 year maturities respectively.

The limited amount of activity witnessed in the secondary bond market during the week cantered on the 2025’s (i.e. 01.06.25 and 01.07.25) and 15.05.31 maturity at levels of 27.95% to 28.25% and 28.75% to 29.75% respectively.

The foreign holding in rupee bonds increased to Rs. 4.94 billion for the week ending 7 September while the daily secondary market Treasury bond/bill transacted volumes for the first four trading days of the week averaged Rs. 11.03 billion.

In money markets, the total outstanding liquidity deficit was registered at Rs. 565.40 billion by the end of the week against its previous weeks of Rs. 597.30 billion while the CBSL’s holding of Government Securities stood at Rs. 2,322.71 billion against its previous weeks of Rs. 2,288.24 billion. The weighted average rate on repo and call money was at 15.50% each for the week.

USD/LKR

In the forex market, the middle rate for USD/LKR spot contracts closed the week at Rs. 362.00 against its previous weeks closing of Rs. 361.45.

The daily USD/LKR average traded volume for the first four trading days of the week stood at $ 35.81 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)