Positive momentum in primary markets continue

• Secondary market activity picks up

By Wealth Trust Securities

The bond market opened the week on a positive note as the Treasury bond auctions conducted yesterday recorded robust outcomes.

The 15.03.2025 and 15.05.2030 maturities recorded weighted average rates of 9.67% and 11.63% respectively, marginally below its previous day’s secondary market closing rates of 9.70/90 and 11.50/70. The total offered amounts of Rs. 30 billion was fully accepted in its first phase of the auction, while an issuance window of 20% of the offered amount on each maturity was opened until close of business of the day prior to settlement (i.e., 4 p.m. on 30.11.2021) at the weighted average yield rates. The bid-to-offer ratio stood at 3.39:1. 

In the secondary bond market, activity increased following the auction outcomes as the maturities of 15.01.26, 15.05.30 and 15.03.31 changed hands at levels of 10.50%, 11.60% to 11.62% and 11.82% respectively. In addition, maturities of 2023’s (i.e., 15.05.23 and 15.12.23) and 15.03.24 traded at levels of 8.35%, 8.55% and 9.19% respectively as well. In secondary market bills, 21 January and 18 February 2022 maturities changed hands at levels of 7.10% and 7.40% respectively.

The total secondary market Treasury bond/bill transacted volume for 26 November 2021 was Rs. 1.03 billion.   

In money markets, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out amounts of Rs. 41.90 billion and Rs. 21.50 billion by way of overnight and seven-day repo auctions at weighted average rates of 5.97% each, while an amount of Rs. 90.44 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 5%. The net liquidity deficit was registered at Rs. 159.31 billion yesterday as an amount of Rs. 313.15 billion was withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6%. The weighted average rates on overnight call money and repo remained mostly unchanged at 5.92% and 5.94% respectively.

USD/LKR   

In the Forex market, the overall market continued to remain inactive while the USD/LKR rate on spot contracts traded at a level of Rs. 203.

The total USD/LKR traded volume for 26 November was $ 67.15 million.   

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