Bond yields decrease once again ahead of weekly bill auctions

By Wealth Trust Securities

The secondary bond market yields rallied to record a decline once again yesterday on the back of renewed buying interest ahead of today’s weekly bill auctions. The yields on the liquid maturities of 15.12.22, 15.01.23, 2024s (i.e. 15.03.24, 15.06.24 & 15.09.24) and 01.05.25 decreased to intraday lows of 7.76%, 7.79%, 8.28%, 8.35% each and 8.49% respectively against its previous day’s closing levels of 7.75/78, 7.80/85, 8.30/35, 8.35/40, 8.37/40 and 8.50/54. In addition, a limited amount of activity was witnessed on the 15.10.21 and 15.12.21 maturities at levels of 7.10% as well.

Today’s weekly Treasury bill auction, will have on offer an amount of Rs. 23 billion consisting of Rs. 7 billion on the 91day maturity, Rs. 4 billion on the 182 day maturity and Rs. 12 billion on the 364 day maturity. At last week’s auction, weighted average yields on the 91 day and 182 day maturities decreased by 01 and 02 basis points respectively to 6.68% and 6.80% while the weighted average yield on the 364 day remained steady at 6.93%. In the secondary bill market, August 2020 and March 2021 maturities changed hands at 6.70% and 6.90% respectively. 

 The total secondary market Treasury bond/bill transacted volume for 8 June was Rs. 3.25 billion. 

 In money markets, the DOD (Domestic Operations Department) of the Central Bank refrained from conducting any auctions for a third consecutive day as the overnight net liquidity surplus in the system increased to Rs. 104.24 billion. The weighted average rates of overnight call money and repo stood at 5.81% and 5.92% respectively. 

LKR loses marginally 

 In the Forex market, the USD/LKR rate on spot contracts depreciated marginally yesterday to close the day at Rs. 185.05/20 against its previous day’s levels of Rs. 185.00/10, subsequent to trading at levels of Rs. 185.08 to Rs. 185.10.

 The total USD/LKR traded volume for 8 June was $ 95.17 million.  

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