Bond market activity remains moderate; yields dip marginally

Wednesday, 4 October 2023 00:25 - - {{hitsCtrl.values.hits}}

Rs. 110 b T-Bill auction in focus
Rupee sees slight appreciation

By Wealth Trust Securities

The secondary bond market started off on a dull note yesterday, but renewed buying interest saw yields dip by the close of business. Accordingly, trading was seen predominantly on the two 2026s (i.e., 01.06.26 and 01.08.26) at levels 15.65% to 15.55%.

In secondary market bills, October, November and December 2023 maturities traded at levels between 17.00% and 18.25% while February 2024 traded at levels of 17.00% to 17.15%. This is ahead of today’s Treasury bill auction.

The total secondary market Treasury bond/bill transacted volume for 2 October was Rs. 19.40 billion.

Today’s weekly Treasury bill auction will have in total an amount of Rs. 110 billion on offer which will consist of Rs. 55 billion on the 91-day maturity, Rs. 30 billion on the 182-day maturity and a further Rs. 25 billion on the 364-day maturity. The previous week’s auction (held on 26.09.23) saw weighted average yields reduced across the board to 17.42%, 15.13% and 13.30% on the three maturities respectively.

In money markets, the weighted average rates on overnight call money and Repo stood at 11.44% and 11.63% respectively while the net liquidity stood at a surplus Rs. 16.98 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight repo auction for Rs. 28.50 billion at a weighted average rate of 11.27%. An amount of Rs. 81.72 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 12.00% and an amount of Rs. 127.20 billion was deposited with the Central Bank’s SLDR (Standard Deposit Facility Rate) of 11.00%.

Forex market

In the forex market, the USD/LKR rate on spot contracts closed the day at Rs. 323.70/324.00 against its previous day’s closing level of Rs. 324.00/324.25.

The total USD/LKR traded volume for 2 October was $ 50.25 million.

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