Bond yields steady ahead of weekly T-Bill auction

By Wealth Trust Securities

The fresh trading week commenced on a steady note yesterday as secondary market bond yields closed the day mostly unchanged on the back of moderate trades. Limited trades were seen on the maturities of 01.10.22, 2023’s (i.e. 15.01.23, 15.11.23 and 15.12.23), 01.12.24 and 15.01.26 at levels of 5.67%, 5.81%, 6.26%, 6.27% to 6.28%, 6.70% and 7.30%, respectively. In the secondary bill market, a 6 August maturity changed hands at a level of 4.95%.

Today’s Treasury bill auction, conducted a day prior due to a shortened trading week, will have on offer a total amount of Rs. 45 billion, Rs. 5 billion below its previous weeks total offered volume. This will consist of Rs. 10 billion on the 91-day maturity and Rs. 17.5 billion each on the 182-day and the 364-day maturities. 

The stipulated cut-off rate on the 364-day maturity was unchanged at 5.21% for a fourth consecutive week while the maximum yield rates of the 91-day and 182-day maturities will be decided below the level of the 364-day maturity at the auction. At last week’s auction, the total accepted volume decreased to 39.76% of its total offered volume while the weighted average rate on the 91-day bill increased by 1 basis point to 5.17%. The weighted average rates on the 182-day and 364-day maturities remained steady at 5.17% and 5.21%, respectively.

Inflation or the National Consumer Price Index (NCPI) for the month of May increased for a fourth consecutive month to 6.1% on its point to point against its previous month of 5.5% while its annual average, too, increased to 5.4% from 5.3%.

The total secondary market Treasury bond/bill transacted volume for 18 June was Rs. 2.99 billion. 

In money markets, the overnight net liquidity surplus was seen decreasing once again to Rs. 87.29 billion yesterday as an amount of Rs. 38.37 billion was withdrawn from Central Bank’s SLFR of 5.50% against its previous day’s Rs. 30.62 billion. An amount of Rs. 125.66 billion was deposited at Central Bank’s SDFR of 4.50% against its previous days of Rs. 124.71 billion. The weighted average rates on overnight call money and repo were registered at 4.81% and 4.90%, respectively.

USD/LKR 

In Forex markets, the USD/LKR rate on cash contracts traded at a level of Rs. 199.99 yesterday while the overall market continued to remain inactive.

The total USD/LKR traded volume for 18 June was $ 62.07 million. 

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