Bond weighted averages come in higher

• Secondary market muted
• Historically high Rs. 400 b accessed from CBSL’s SLFR

By Wealth Trust Securities  

The Treasury bond auctions conducted yesterday saw its weighted average rates come in higher than its pre-auction secondary market rate while the offered amounts on all four maturities was successfully taken up at its first phase of the auction.

The 01.05.2025, 15.10.2027 and  01.01.2029 maturities recorded weighted average rates of 9.70%, 10.90% and 11.27%  respectively against its previous day’s secondary market closing rates of 9.40/45, 10.10/12 and 10.25/95 for similar maturities while the 15.03.2031 maturity recorded a weighted average rate of 11.61% against its previous day’s closing rate of 11.35/55.

A Direct Issuance window of 20% of the offered amount on each maturity was opened until close of business of the day prior to settlement (i.e. 4 pm on 14.12.2021). 

In the secondary bond market, two-way quotes were seen widening subsequent to the auction results while transactions were only seen on the 15.03.25 maturity at a low of 9.40% to a high 9.55% yesterday. In secondary bills, 11 February and 10 June 2022 maturities changed hands at levels of 7.00% and 7.7825% respectively. 

The total secondary market Treasury bond/bill transacted volume for 10 December was Rs. 8.16 billion.   

In money markets, a historically high volume of Rs. 403.04 billion was accessed from Central Banks Standard Lending Facility Rate (SLFR) of 6.00% yesterday which led to the net liquidity deficit increasing further to Rs. 304.97 billion.

The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out amounts of Rs. 24.8 billion and Rs.10.5 billion by way of overnight and 7 day repo auctions at weighted average rates of 5.99% and 5.98% respectively while an amount of Rs.62.77 billion was deposited at Central Banks Standard Deposit Facility Rate (SDFR) of 5.00%. The weighted average rates on overnight Call money and REPO stood at 5.92% and 5.98% respectively.

USD/LKR

In the Forex market, the USD/LKR rate on spot contracts traded within the range of Rs. 202.80 to Rs. 203.00 while the broader market remained inactive yesterday.

The total USD/LKR traded volume for 10 December was $ 40.40 million.   

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