Bond market sluggish ahead of T-Bond auctions

By Wealth Trust Securities

The fresh trading week commenced on a dull note as activity in the secondary bond market continued at a sluggish pace yesterday. 

A sole trade on the 01.05.24 maturity was registered at 32.20%.

Today’s auction, conducted in lieu of a Treasury bond maturity of Rs. 120.00 billion due on the 15 December, will see a total amount of Rs. 160 billion on offer. 

The breakup would be Rs. 40.00 billion on a 01.05.2024 maturity, Rs. 50 billion on a new 15.01.2025 maturity and a further Rs. 70 billion on a 15.05.2026 maturity. 

At the last round of bond auctions conducted on the 29 November 2022, the 15.05.26 maturity was issued at a weighted average rate of 31.69% while its offered amount of Rs. 25.00 billion was accepted at its 1st phase. 

A further Rs. 5.00 billion was also issued under its direct issuance window. However, only an amount of Rs. 21.83 billion of the 01.05.24 maturity was accepted at a weighted average rate of 32.71% against an offered amount Rs. 25 billion.

In money markets, the weighted average rate on overnight call money was registered at 15.50% yesterday while the net liquidity deficit stood at Rs. 275.80 billion. 

An amount of Rs. 340.98 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 14.50% against an amount of Rs. 616.78 billion withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 15.50%.

Forex Market 

In the Forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 363.18 yesterday.

The total USD/LKR traded volume for 9 December was $ 31.31 million.  

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