Bond market bearish ahead of Treasury bond auctions

By Wealth Trust Securities

The secondary bond market remained bearish yesterday at the start of a new trading week and ahead of two Treasury bond auctions. Only the 15.05.31 maturity traded at a level of 28.00% yesterday.

The Treasury bond auctions due today will see a total volume of Rs. 75 billion on offer, consisting of Rs. 30 billion of a 01.07.2025 maturity and Rs. 45 billion of a new 01.07.2032 maturity.

The bond auctions conducted on 30 August saw the 15.05.31 maturity record a weighted average rate of 29.52% while its total offered amount of Rs. 25 billion was successfully accepted. Furthermore, an additional amount of Rs. 3.43 billion was also taken up under its direct issuance window. 

However, the other maturity of 01.07.25 saw only an amount of Rs. 2.44 billion being accepted in successful bids against its offered amount of Rs. 15 billion at a weighted rate of 29.16%.

The total secondary market Treasury bond/bill transacted volume for 09 September was Rs. 4.27 billion.   

In money markets, the weighted average rate on overnight REPO stood at 15.50% while an amount of Rs. 789.45 billion was withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 15.50%. 

Nevertheless, an amount of Rs. 358.98 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 14.50%. The net liquidity deficit stood at Rs. 430.47 billion yesterday.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts traded at levels of Rs. 363.00 to Rs. 363.20 yesterday while the middle rate for USD/LKR spot contracts stood at Rs. 362.20 against its previous days of Rs. 362.00.

The total USD/LKR traded volume for 09 September was $ 28.14 million.  

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