Wednesday Sep 25, 2024
Wednesday Sep 25, 2024
Monday, 28 March 2022 02:02 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The activity in the secondary bond market reduced during the trading week ending 25 March as yields were seen increasing on the back of moderate volumes.
The increase in yields was led by the two-year duration of 01.08.24 as it was seen hitting a weekly high of 15.10% against its previous week’s closing level of 14.15/25.
In addition, selling interest on the maturities of 01.09.23 and 15.06.27 saw its yields hit intraweek highs of 14.00% and 15.25% respectively as well reflecting an upward shift, mainly on the short to mid-term end of the yield curve.
The upward momentum was further supported by the weekly Treasury bill auction results, where the steep increases in weighted averages were seen continuing for a fourth consecutive week with the market favourite 91-day bill crossing the 12.00% psychological level for the first time since May 2012 to record 12.10%.
In secondary market bills, May and June’s maturities changed hands at levels of 10.00% to 10.25% and 11.50% and 11.60% respectively, pre-auction while the latest 91-day bill was traded at levels of 12.20% to 12.30%, following the auction results.
The National Consumer Price Index (NCPI; Base 2013=100) for the month of February increased further to a high of 17.5% on its point to point against its previous month’s figure of 16.8% along with the annual average increasing as well to 9.3% from 8.1%.
The foreign holding in rupee bonds remained mostly unchanged at Rs. 2.65 billion for the week ending 23 March while the daily secondary market Treasury bond/bill transacted volumes for the first four trading days of the week averaged Rs. 10.75 billion.
In money markets, the weighted average rates on call money and repo remained mostly unchanged at 7.49% and 7.50% respectively for the week as a volume exceeding Rs. 580 billion was withdrawn on a daily basis during the week from Central Banks SLFR (Standard Lending Facility Rate) of 7.50%.
The total outstanding liquidity deficit increased during the week to Rs. 660.65 billion by the end of the week against its previous weeks of Rs. 613.23 billion.
The Domestic Operations Department (DOD) of the Central Bank was seen injecting liquidity by way of 7- and 31-days reverse repo auctions at weighted average rates of 7.50% and 9.43% respectively.
The CBSL’s holding of Government securities was registered at Rs. 1,700.56 billion against its previous weeks of Rs. 1,699.98 billion.
Forex market
In forex markets, overall activity moderated during the week while limited trades were witnessed on the USD/LKR cash and spot contracts at a level of Rs. 279.00 to 295.00.
The daily USD/LKR average trading volume for the four trading days of the week stood at $ 28.89 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
