Downward momentum in bond yields continue

• Money market liquidity increases further

By Wealth Trust Securities

The secondary bond market witnessed continued buying interest across the curve yesterday as yields on the liquid maturities of two 2021’s (01.08.21 & 15.12.21), 15.03.22, three 2023’s (15.03.23, 15.07.23, 15.12.23), 15.03.24, 01.08.26, 15.01.27 and 01.05.29 were seen dipping to intraday lows of 10.00%, 10.00%, 10.12%, 10.45%, 10.50%, 10.52%, 10.63%, 10.85%, 10.92% and 11.02% respectively against its previous day’s closing level of 10.00/10, 10.05/12, 10.25/32, 10.50/55, 10.55/65, 10.60/70, 10.72/75, 10.88/92, 10.95/97 and 11.05/08. In addition, activity was witnessed on the two 2019’s (i.e. 01.07.19 and 15.09.19), 01.10.22, 01.08.24, 01.08.25 and 15.06.27 maturities at levels of 9.00% to 9.05%, 10.20% to 10.27%, 10.70%, 10.85% and 10.96% to 10.98% respectively. 

The total secondary market Treasury bond/bill transacted volumes for 3 May was Rs. 14.17 billion. 

In money markets, the Overnight net liquidity was seen increasing further to record Rs. 79.23 billion yesterday. Overnight call money and repo averaged 8.49% and 8.59% respectively. 

Rupee loses 

 The USD/LKR rate on the spot next contract was seen depreciating further to close the day at Rs. 177.60/80 against its previous weeks closing of Rs. 177.30/50 on the back of continued buying interest by banks. The spot contracts were quoted at Rs. 177.50/70.

The total USD/LKR traded volume for 3 May was $ 150.83 million

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 178.45/75; 3 months -180.20/50 and 6 months - 182.85/15.