Downward trend in bond yields continue

 By Wealth Trust Securities

The downward trend in secondary market bond yields continued yesterday on the back of persistent foreign and local buying interest. 

The yields, mainly on the shorter tenure maturities of 01.03.21 and 01.05.21, were seen hitting intraday lows of 9.10% each with considerable volumes changing hands. In addition, the mid-term maturities of 01.06.26 and 01.08.26 were traded within the range of 9.45% to 9.58%, admitting moderate volumes.

The total secondary market Treasury bond/bill transacted volumes for 10 January 2018 was Rs. 12.06 billion.

In money markets, the Central Bank’s Open Market Operations (OMO) Department continued to drain out liquidity on a permanent basis as it was seen mopping up excess liquidity by way of two repo auctions and three auctions for outright sales of Treasury bills. In total an amount of Rs. 14 billion was mopped up for 14 to 77 days at weighted averages ranging from 7.47% to 7.60% through the auctions, valued today

Furthermore, the OMO Department drained out an amount of Rs. 3.47 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 decreased to Rs. 7.94 billion yesterday. The overnight call money and repo rates averaged 8.09% and 7.57% respectively.

Rupee depreciates marginally

The USD/LKR rate on spot contracts depreciated marginally yesterday to close the day at Rs. 153.82/85 on the back of moderate activity. The total USD/LKR traded volume for 10 January 2017 was $ 72.25 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.60/65; three months - 156.25/35 and six months - 158.60/70.