Bond market sluggish, yields edge up

• Rupee appreciates significantly

By Wealth Trust Securities

The secondary bond market activity commenced the week on a somewhat subdued note yesterday with moderate activity and yields creeping up in comparison to its previous week’s closings. Trading continued to be seen across the yield curve. Accordingly, the selected liquid maturities of the two 25’s (01.06.25 and 01.07.25), two 26’s (15.05.26 and 01.06.26), 01.05.27, two 28’s (15.01.28 and 01.07.28), 15.07.29, 15.05.30 and 15.05.31 were seen changing hands within the levels of 14.90%, 14.92% to 15.15%, 15.13% to 15.15%, 15.00%, 14.40%, 14.30% and 14.25% respectively.  

In secondary bills, November/December 2023 and January/February 2024 maturities traded at levels of 14.50% to 14.25% and 15.65% to 15.35% respectively.

The total secondary market Treasury bond/bill transacted volume for 3 November 2023 was Rs. 14.52 billion.

In money markets, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight of Rs. 24.78 billion at weighted average rates of 10.12%. Furthermore, an amount of Rs. 12.63 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 11.00% while an amount of Rs. 16.50 billion was deposited in the Central Banks SLDR (Standard Deposit Facility Rate) of 10.00%. The net market liquidity deficit stood at Rs. 20.90 billion yesterday.

The weighted average rates on overnight call money and repo were registered at 10.26% and 10.80% respectively.

Forex Market

 In the Forex market, the Rupee or USD/LKR rate on spot contracts appreciated, closing trading yesterday at Rs.326.75/327.25 against its previous day’s closing level of Rs.329.00/330.00.

The total USD/LKR traded volume for 3 November 2023 was US $ 81.80 million.

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