First Buy-Back Auction in almost a year

Tuesday, 19 December 2023 01:57 - - {{hitsCtrl.values.hits}}

Secondary bond market volatile; activity remains strong
Rupee flat

By Wealth Trust Securities

The secondary bond market commenced the week with robust activity. Where yields edged down initially but were seen reversing gains during the day to close broadly steady. This was against the backdrop of the first Buy-Back Auction since January of 2023. Where an amount of Rs. 1.5 billion was repurchased on the 15.05.26 and 01.08.26 maturities at the weighted average rates of 13.71% and 13.73% respectively.

Trading was seen mostly on the short to medium tenors. Accordingly, trades were seen on the maturities of the two 26’s (15.05.26 and 01.08.26), three 27’s (15.01.27, 01.05.27 and 15.09.27), two 28’s (01.05.28 and 01.07.28), 15.07.29 and 15.05.30, as it changed hands at levels of 13.85% to 13.65%, 13.90% to 13.70%, 14.05% to 13.95%, 13.95% and 14.15% to 14.05% respectively. In secondary market bills, February, March and June 2024 maturities traded from 14.45% to 14.10%, 14.45% to 14.40% and 14.15%.

The total secondary market Treasury bond/bill transacted volume for 15 December was Rs. 17.39 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 9.16% and 9.70% respectively while the net liquidity stood at a deficit of Rs. 87.61 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight Repo auction for Rs. 37.55 billion at the weighted average rates of 9.06%. An amount of Rs. 51.12 billion was withdrawn from Central Bank’s SLFR (Standard Lending Facility Rate) of 10.00% while an amount of Rs. 1.06 billion was deposited at its SDFR (Standard Deposit Facility Rate) of 9.00%.

Forex market

In the forex market, the USD/LKR rate on spot contracts closed the day broadly steady at Rs. 326.80/327.00 yesterday against its previous day’s closing level of Rs. 326.90/327.10. The total USD/LKR traded volume for 18 December was $ 61.05 million.

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