Bond yields decrease marginally ahead of weekly bill auction

By Wealth Trust Securities

The secondary market bond yields were seen decreasing once again yesterday on the back of increased activity. The 15.10.27 maturity was the most traded duration as it was seen hitting an intraday low of 11.10% against its opening high of 11.35%. In addition, limited trades on the 15.03.25, 01.01.29 and 15.03.31 maturities were witnessed at levels of 9.50% to 9.70%, 11.30%, and 11.60% to 11.66%, respectively, while two-way quotes on the rest of the yield curve were seen decreasing as well.

In secondary bills, 28 January, 11 February and 10 June 2022 maturities changed hands at levels of 7% to 7.05%, 6.98% to 7.06% and 7.78%, respectively. 

This is ahead of today’s bill auction, where, in total, an amount of Rs. 66 billion will be on offer, consisting of Rs. 20 billion on the 91-day, Rs. 22 billion on the 182-day and Rs. 24 billion on the 364-day maturities. At last week’s auction, weighted average rates on all three maturities decreased for a fifth consecutive week to 7.05%, 7.84% and 8.11%, respectively.

The total secondary market Treasury bond/bill transacted volume for 13 December 2021 was Rs. 35.54 billion. 

In money markets, the weighted average rates on call money and repo remained steady at 5.92% and 5.98%, respectively, as an amount of Rs. 395.18 billion was withdrawn from Central Bank SLFR (Standard Lending Facility Rate) of 6%.

The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out amounts of Rs. 25.55 billion and Rs. 4 billion by way of overnight and seven-day repo auctions at weighted average rates of 5.99% each while an amount of Rs. 69.35 billion was deposited at Central Bank SLFR (Standard Deposit Facility Rate) of 5%.

The net liquidity deficit stood at Rs. 296.28 billion yesterday.

USD/LKR 

In the forex market, the overall market remained inactive yesterday.

The total USD/LKR traded volume for 13 December 2021 was $ 35.56 million. 

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