Bond yields continue to decline

By Wealth Trust Securities

The secondary bond market remained active yesterday as foreign and local buying interest across the curve led to yields decreasing further. The liquid maturities of two 2021’s (i.e. 01.03.21 & 15.12.21), two 2023’s (i.e. 15.05.23 & 15.12.23), 15.03.25 and two 2026’s (01.06.26 & 01.08.26) saw its yields dip to intraday lows of 10.80%, 10.88%, 11.25%, 11.15%, 11.39% and 11.42% and 11.40% respectively against its previous day’s closing levels of 10.80/90, 10.92/94, 11.20/30, 11.25/29, 11.43/48, 11.48/53 and 11.40/48.

Furthermore, buying interest on the 01.09.28 maturity saw its yield dip to an intraday low of 11.40% as well against its days opening high of 11.50%. Meanwhile, in the secondary Treasury bill market, December 2018 and January bills were seen changing hands at levels of 10.57% and 10.66% respectively. 

The total secondary market Treasury bond/bills transacted volume for 16 January was Rs. 25.32 billion. 

In the money market, the OMO Department of the Central Bank infused liquidity by way of an overnight reverse repo auction for successful amount of Rs. 25 billion, at a weighted average yield of 9.00% as the net liquidity shortfall stood at Rs. 96.45 billion yesterday. The overnight call money and repo rates averaged 8.98% and 8.99% respectively.   

 

Rupee appreciates considerably 

The USD/LKR rate on spot contracts was seen appreciating yesterday on the back of foreign buying in rupee bonds and export conversions to close the day at Rs. 181.60/80 against its previous day’s closing of Rs. 182.35/45.

The total USD/LKR traded volume for 16 January was $ 147.20 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month – 182.45/85; three months – 184.40/80 and six months – 187.40/80.