Bond market positive momentum continues ahead of weekly bill auction

Wednesday, 19 July 2023 00:10 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The continued buying interest on the liquid maturities of 01.05.28 and 15.05.30 saw its secondary market yields decrease yesterday ahead of today’s weekly Treasury bill auction.

The yields on the said maturities decreased to intraday lows 15.10% and 14.88% respectively against its previous day’s closing level of 15.30/40 and 15.10/25. In addition, maturities of 01.07.32, 15.15.26 and two 2027’s (i.e., 01.05.27 and 15.09.27) changed hands at levels of 14.40% to 14.60%, 15.50% and 15.10 to 15.50 and 15.40% to 15.65% respectively as well.

Today’s weekly Treasury bill auction will have in total an amount of Rs. 160 billion on offer which will consist of Rs. 70 billion on the 91-day maturity, Rs. 50 billion on the 182-day maturity and a further Rs. 40 billion on the 364-day maturity. At last week’s auction, weighted averages increased across the board to 19.08%, 16.95% and 14.04% on the 91-day, 182-day and 364-day maturities respectively. An amount of Rs. 129.66 billion was accepted in total on all three maturities at its 1st and 2nd phases of the auction against its total offered amount of Rs. 160 billion.

The total secondary market Treasury bond/bill transacted volume for 17 July was Rs. 24.07 billion.

In money markets, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of overnight and 7-day reverse repo auctions for a total volume of Rs. 125.00 billion at weighted average rates of 11.80% and 12.00% respectively as the net liquidity deficit stood at Rs. 214.64 billion yesterday. An amount of Rs. 105.34 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 12.00% against an amount of Rs. 15.70 billion deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 11.00%.

The weighted average rates on overnight call money and repo were registered at 11.95% and 12.00% respectively.

Forex market

In the Forex market, the USD/LKR rate on spot contracts traded within the range of Rs. 322.00 to Rs. 323.00 yesterday before closing the day at Rs. 322.50/323.50 against its previous day’s closing level of Rs. 322.00/324.00. The total USD/LKR traded volume for 17 July was $ 118.00 million.

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