Bond yields increase marginally in dull trade

By Wealth Trust Securities 

Secondary market bond yields were seen increasing yesterday on the back of limited trades as overall activity continued to remain very dismal. 

The outlook revision of Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating to Negative from Stable, coupled with a spike at Wednesday’s Treasury bill auction weighted averages were seen as the reasons behind the increase in yields.  

Limited trades were witnessed on the liquid maturities of 15.09.24 and 15.10.27 at levels of 9.95% and 10.20% to 10.22% respectively against its previous day’s closing levels of 9.90/95 and 10.10/18. In addition, maturities of 15.07.23 and 01.01.24 changed hands at levels of 9.60% and 10.00% respectively. In secondary bills, June and July 2020 maturities traded at levels of 7.82% and 8.00% respectively.

The total secondary market Treasury bond transacted volume for 18 December was Rs. 8.01 billion.

In money markets, the Open Market Operations (OMO) Department of the Central Bank refrained from conducting any auctions yesterday as the overnight net liquidity surplus in the system increased to Rs. 37.99 billion. The overnight call money and repo rates averaged 7.52% and 7.57% respectively.

Rupee dips

In the Forex market, the USD/LKR rate on spot contracts was seen depreciating yesterday to close the day at Rs. 181.35/45 against its previous day’s closing levels of Rs. 181.15/25 on the back of buying interest by banks.

The total USD/LKR traded volume for 18 December was $ 39.19 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 181.70/00; three months - 182.70/05 and six months - 184.40/80

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