Bond yields fluctuate

Monday, 15 May 2023 04:19 - - {{hitsCtrl.values.hits}}

Weekly weighted averages remain broadly steady
Rupee appreciates considerably
Foreign buying continues

By Wealth Trust Securities

The secondary market bond yields were seen fluctuating during the week ending 12 May, continuing its increasing trend during the early part of the week and decreasing during the latter part of the week following the weekly bill auction outcome and LKR appreciation in the dollar/rupee market.

At the auction, weighted average rates remained broadly steady for the first time in five weeks while an amount of Rs. 175 billion was accepted in total against its total offered amount of Rs. 140 billion.

In the interbank forex market, the USD/LKR rate on spot contracts appreciated considerably during the week to close the week at Rs. 312.90/313.30 against its previous week’s closing level of Rs. 319.00/319.40 on the back of selling interest on the greenback.

The foreign holding in rupee securities increased further for a 13th consecutive week by Rs. 4.61 for the week ending 11 May while its overall tally was registered at Rs. 130.76 billion.

In the secondary bond market, yields on the liquid maturities of 15.05.26 and two 2027’s (i.e., 01.05.27 and 15.09.27) increased to weekly highs of 30.65%, 28.85% and 28.60% respectively before reversing some of its lost ground to hit lows of 30.25% and 28.00% each respectively. In addition, 2025 maturities (i.e., 15.01.25 and 01.07.25) traded within the range of 30.00% to 30.25% as well.

In money markets, the total outstanding liquidity deficit stood at Rs. 57.59 billion by the end of the week against its previous week’s deficit of Rs. 32.37 billion while CBSL’s holding of Government Securities was registered at Rs. 2,602.74 billion against its previous week’s of Rs. 2,724.33 billion.

The daily secondary market Treasury bond/bill transacted volumes for the first four trading days of the week averaged Rs. 47.40 billion.

The daily USD/LKR average traded volume for the first four days of the week stood at $ 110.41 million.

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