Bond yields continue to trickle down

By Wealth Trust Securities

The buying interest witnessed in the secondary bond market over the previous two days continued yesterday as well, with yields deceasing across the yield curve while activity continued to pick up. 

The maturities of 15.03.25, 15.01.26, 15.01.27 and 15.50.30 changed hands within the range of 9.62% to 9.65%, 10.05% to 10.14%, 10.63% to 10.65% and 11.50% to 11.55% respectively, against its previous day’s closing levels of 9.65/70, 10.10/18, 10.65/72 and 11.57/62. 

In addition, maturities of 2023 (i.e. 15.07.23, 01.09.23 and 15.12.23) traded at levels of 8.45%-8.70% respectively as well.

In secondary bills, February to March 2022 maturities were seen changing hands at levels of 7%-7.20%, while 31 December 2021 and 3 June 2021 maturities traded at 6.75%, and 7.64% - 7.93% respectively.

The total secondary market Treasury bond/bill transacted volume for 1 December was Rs. 34.99 billion.   

In money markets, the weighted average rates on overnight call money and repo remained steady at 5.92% and 5.97% respectively as an amount of Rs. 342.67 billion was withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 6%. 

The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka drained out an amount of Rs. 30 billion by way of an overnight repo auction at a weighted average rate of 5.98%, while an amount of Rs. 78.86 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 5%. The net overnight liquidity shortfall increased to Rs. 233.81 billion yesterday. Furthermore, the OMO department of Central Bank conducted auctions for outright sales of Treasury bills totalling Rs. 10 billion for periods ranging from 77 days to 98 days. A total of Rs. 7.10 billion was accepted in total at weighted averages ranging from 7.08% to 7.23%.

USD/LKR   

In USD/LKR market continued to remain inactive. The total USD/LKR traded volume for 1 December 2021 was $ 76 million.   

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