Friday Sep 20, 2024
Friday Sep 20, 2024
Monday, 11 March 2019 00:10 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The downward trend of secondary market bond yields witnessed over the past two weeks, continued during the week ending 8 March as well, along with the successful launch and pricing of Sri Lanka’s thirteenth USD benchmark offering. 
The issue consisted of $1 billion at 6.85% for a period of five years and $1.4 billion at 7.85% for a period of ten years.
The drop in yields was also witnessed at the weekly Treasury bill auction where the weighted average yield of the 364 day maturity decreased for a second consecutive week to 10.64%.
In the secondary bond market the two 2021 maturities (i.e. 01.08.21 and 15.12.21) were seen decreasing to lows of 10.60% each against its previous weeks closing levels of 10.75/78 and 10.77/83, while the 2023s (i.e.15.03.23 and 15.07.23) dropped to lows of 10.75% and 10.70% respectively against its previous weeks closing levels of 10.92/98 and 10.95/00. Furthermore, the maturities of 01.08.26, 15.01.27, 15.06.27 and 01.05.29 dipped to lows of 10.93%, 10.95%, 11.05% and 11.23% respectively. Buying interest was also witnessed in the bill market with the latest 364 day maturity changing hands at a low of 10.49%. However, the two-way quotes widened towards the later part of the week.
The foreign holding of Sri Lankan rupee bonds recorded an increase for the first-time in three weeks with an inflow of Rs. 0.64 billion during the week ending 6 March.
The daily secondary market Treasury bond/bill transacted volume for the first three days of the week averaged Rs. 10.73 billion.
In money markets, the overnight call money and repo rates decreased during the week to average at 8.90% and 8.93% respectively against its previous week’s level of 8.96% and 8.98% as the total outstanding market liquidity shortfall stood at Rs. 48.15 billion. The Open Market Operations (OMO) Department injected liquidity throughout the week on an overnight basis at a weighted average rate of 9.00% in addition to injecting funds by way of a seven to 14 day reverse repo auctions at weighted average yields ranging from 8.82% to 9.00%.
Rupee gains during the week
The rupee closed the week higher at Rs. 178.40/55 against its previous weeks closing level of Rs. 179.55/70 subsequent to trading within the range of Rs. 178.00 to Rs. 179.80.
The daily USD/LKR average traded volume for the three days of the week stood at $105.38 million.
Some of the forward dollar rates that prevailed in the market were one month - 179.35/55; three months - 181.15/45 and six months - 184.10/40.
