Bond yields increase marginally ahead of bill auctions

By Wealth Trust Securities

The secondary market bond yields were seen increasing marginally yesterday on the back of moderate volumes, ahead of today’s weekly Treasury bill auctions. Activity mainly surrounded on the 15.12.22 and 15.01.23 maturities as its yields were seen hitting intraday highs of 5.45% and 5.50% respectively against its previous day’s closing levels of 5.35/40 and 5.40/45 while the 01.05.25 and 01.02.26 maturities changed hands at highs of 6.28% and 6.45% respectively. In addition, maturities of 15.09.24 and 2025s (i.e. 01.08.25 & 15.10.25) traded at levels of 6.03%, 6.40% and 6.33% respectively.

Today’s auction will have on offer a total amount of Rs. 35.1 billion, consisting of Rs. 4.6 billion of the 91 day, Rs. 6.0 billion of the 182 day and Rs. 24.5 billion of the 364 day maturity. Stipulated cut off rates were published as 4.65%, 4.75% and 4.91%. At last week’s auctions, weighted average rates decreased across the board by 43 basis points each and 41 basis points to 4.65%, 4.75% and 4.91% respectively. In secondary bills, August and October 2020 maturities were seen changing hands at 4.57% to 4.60%. The total secondary market Treasury bond/bill transacted volumes for 20 July was Rs. 4.25 billion.  In money markets, the weighted averages on overnight call money and repo rates stood at 4.52% and 4.55% respectively yesterday. This was despite liquidity in the system decreasing further to Rs. 114.28 billion. 

USD/LKR

In the Forex market, the USD/LKR rate on spot contracts were seen changing hands at levels of Rs. 185.75 to Rs. 185.82 yesterday before closing the day at Rs. 185.75/85. The total USD/LKR traded volume for 20 July was $ 83.05 million. 

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