Bond yields decrease ahead of weekly auction

By Wealth Trust Securities Ltd 

Renewed buying interest on the liquid maturities of 2027’s (i.e 01.05.27 and 15.09.27) saw secondary market bond yields decreasing yesterday ahead of the weekly Treasury bill auction due today. The yields on the said maturities decreased to intraday lows of 24.00% each against its previous day’s closing level of 24.60/75. In addition, maturities of 01.07.25 and 15.05.26 changed hands at levels of 26.50% to 27.00% and 25.50% to 25.75% respectively as well.

Today’s weekly Treasury bill auction will have in total an amount of Rs. 140 billion on offer which will consist of Rs.65 billion on the 91-day maturity, Rs.30 billion on the 182-day maturity and a further Rs. 45 billion on the 364-day maturity.

At last week’s auction, which was held prior to the monetary policy adjustment, weighted averages decreased marginally across the board to 25.65%, 25.29% and 22.91% on the 91-day, 182-day and 364-day maturities respectively. An amount of Rs. 160 billion was accepted at the 1st phase of the auction while a further amount of Rs.20 billion was raised at its phase II.

The total secondary market Treasury bond/bill transacted volume for 5 June 2023 was Rs. 7.76 billion.

In money markets, the DOD (Domestic Operations Department) of Central Bank was seen injecting an amount of Rs. 39.75 billion on an overnight basis by way of a Reverse Repo auction at a weighted average of 13.50% as the net liquidity shortfall stood at Rs. 127.80 billion yesterday. The weighted average rates on overnight call money and repo stood at 13.96% and 14.00% respectively.

Forex Market 

In the Forex market, the USD/LKR spot contracts closed the day at Rs. 291.50/292.50 yesterday against its previous day’s closing level of Rs. 290.50/291.50, subsequent to trading within the range of Rs. 291 to Rs.292.

The total USD/LKR traded volume for 5 June was $ 44.30 million.  

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