Bond market activity picks up on positive sentiment

• Rupee broadly steady

By Wealth Trust Securities

The secondary bond market saw increased activity with some optimistic buying interest causing yields to edge down. Accordingly, trading was predominantly seen on the short to medium end of the yield curve. The two 2025’s (01.06.25 and 01.07.25), two 2026’s (i.e., 15.05.26 and 01.06.26), two 2027’s (15.01.27 and 15.09.27), 01.07.28 and 15.05.30 maturities changed hands between the levels of 13.60% to 13.50%, 14.10% to 13.95%, 14.15% and 14.25% respectively.

Additionally, in secondary market bills December 2023 maturities were seen trading at 12.88% while January, February and March 2024 maturities were seen changing hands between 13.10% to 13.00%, 14.35% to 14.10% with considerable volumes transacted.

The total secondary market Treasury bond/bill transacted volume for 6 December 2023 was Rs. 103.34 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 9.24% and 9.74% respectively while the net liquidity stood at a deficit of Rs. 27.42 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight repo auctions for Rs. 21.29 billion at a weighted average rate of 9.06%. An amount of Rs. 7.51 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 10.00% while an amount of Rs. 1.37 billion was deposited with the Central Banks SLDR (Standard Deposit Facility Rate) of 9%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day broadly steady at Rs. 326.60/326.90 against its previous day’s closing level of Rs. 326.70/327.00.

 The total USD/LKR traded volume for 25 October was $ 127.90 million. 

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