Bond yields increase for first time in nine trading sessions

By Wealth Trust Securities

The secondary market bond yields were seen increasing yesterday for the first time in nine trading sessions reversing a downward trend over the past eight sessions. 

Considerable selling interest on the liquid maturities of 01.03.21, the two 2026’s (i.e. 01.06.26 and 01.08.26) and 15.06.27 saw its yields hitting intraday highs of 9.30% and 9.75% each. In addition, 2019 and 2022 maturities changed hands within the range of 9.00% to 9.15% and 9.55% to 9.60% respectively as well. On the long end of the curve, the 15.05.30 maturity was traded at highs of 9.93% to 9.95%.

The total secondary market Treasury bond/bill transacted volumes for 5 January 2018 was Rs. 11.44 billion.

In money markets, the OMO Department of Sri Lanka drained out an amount of Rs. 14.16 billion on an overnight basis by way of a repo auction at a weighted average of 7.25% as the net surplus liquidity in the system stood at Rs. 38.69 billion yesterday. The overnight call money and repo rates averaged 8.15% and 7.53% respectively.

Furthermore, the OMO Department drained out liquidity on a permanent basis as it was seen mopping up excess liquidity by way of an auction for the outright sale of Treasury bills. An amount of Rs. 0.5 billion was mopped up for 66 days at a weighted average of 7.60% through the auction, valued today.

Rupee dips

The USD/LKR rate on spot contracts depreciated marginally yesterday to close the day at Rs. 153.80/85 on the back of buying interest by banks.

The total USD/LKR traded volume for 5 January 2017 was $ 32.90 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.70/85; three months - 156.45/65 and six months - 159.10/25.