Bond market muted during the holiday week

• Subscription at weekly bill auction continues to increase
• Money market liquidity decreases once again
• Rupee appreciates

By Wealth Trust Securities

The activity in the secondary bond market was at a standstill during the shortened trading week ending 16 April, while yields were seen closing the week broadly steady in comparison to its previous week’s closings. The limited trades were seen on the maturities of 01.05.21, 15.10.21, 15.11.22, 15.07.23 and 15.11.23 at levels of 4.70%, 5.10%, 6%, 6.35% and 6.50% respectively. In the secondary bill market, July maturities were traded at a level of 5% to 5.10%. 

Nevertheless, the total accepted amount at the weekly Treasury bill auction was seen increasing to a six-week high of Rs. 35.47 billion while the foreign holding in rupee bonds remained mostly unchanged at Rs. 6.20 billion for the week ending 12 April.

The daily secondary market Treasury bond/bill transacted volumes for the first two trading days of the week averaged Rs. 17.90 billion.  

In money markets, the total outstanding market liquidity was seen decreasing once again during the week to a low of Rs. 80.79 billion against its previous weeks closing of Rs. 106.77 billion while CBSL’s holding of Gov. Securities decreased to Rs. 898.28 billion against its previous weeks of Rs. 903.18 billion. The weighted average rates on overnight call money and repo remained mostly unchanged to average 4.64% and 4.67% respectively for the week. 

 USD/LKR appreciates

In Forex markets, the USD/LKR rate on spot contracts was seen trading within a range of Rs. 192 to Rs. 199.95 before closing the week at Rs.192/193.50 in comparison to its one-week forward contract closing of Rs. 202/203 the previous week.  

The daily USD/LKR average traded volume for the first two days of the week stood at $ 60.04 million.  

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