Bond market activity remains moderate ahead of weekly auction

• Money market liquidity dips further

By Wealth Trust Securities

The activity in the secondary bond market remained moderated yesterday with most market participants opting to be on the sidelines. Limited trades were seen on the maturities of 15.12.22, 2023’s (i.e. 01.09.23 & 15.12.23) and 2024’s (i.e. 01.01.24, 15.03.24, 01.08.24 & 15.09.24) at levels of 5.83% to 5.85%, 6.22% to 6.30% and 6.35% to 6.56% respectively. In the secondary bill market, May 2021 and January 2022 bills traded at levels of 4.85% and 5.04% respectively. 

Today’s weekly Treasury bill auction will have in total Rs. 45 billion on offer, consisting of Rs. 10 billion each of the 91-day and 182-day maturities and a further Rs. 25 billion of the 364-day maturity. At last week’s auction, weighted average rates on the 91-day and 182-day maturities increased by 4 and 3 basis points respectively to 4.99% and 5.06%, while the weighted average rate on the 364-day remained steady 5.10%. The maximum yield rate for acceptance on the 364-day maturity increased by 2 basis points this week to 5.12%, while the yield rates of the 91-day and 182-day maturities will be decided below the level of the 364-day maturity at the auction. 

In money markets, the overnight surplus liquidity was seen decreasing further to Rs. 138.56 billion yesterday. The weighted average rates on call money and repo were registered at 4.55% and 4.57% respectively.

The total secondary market Treasury bond/bill transacted volume for 15 March was Rs. 3.13 billion.   

 Rupee dips

In the Forex market, USD/LKR rate on the more active one-week forward contracts were seen depreciating marginally to close the day at Rs. 199.50/200.50 in comparison to its previous day’s closing level of Rs.198/199.75. The total USD/LKR traded volume for 15 was $ 114.25 million. 

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