Primary market yields increase

Tuesday, 17 May 2022 02:18 - - {{hitsCtrl.values.hits}}

Secondary bond market activity moderates
CBSL introduces middle rate for USD/LKR

By Wealth Trust Securities

The primary market yields increased while activity in secondary bond market moderated during the week ending 13 May as most market participants were seen on side-lines on the back of limited trading hours.

At the weekly Treasury bill auction, weighted average rates were seen increasing across the board for the first time in three weeks while the total accepted amount fell below the total offered amount for the first time in three weeks as well.

Furthermore, the outcome of the Treasury bond auctions saw its weighted averages come in higher than its previous round of auctions. The increases in weighted average rates were 152 basis points and 53 basis points on the three-year and five-year maturities respectively to 22.69% and 23.53%.

In secondary bond market, limited trades were seen on the maturities of 15.11.23 and 01.06.25 maturities at levels of 25.00% and 23.47% respectively while overall activity moderated during the week. The foreign holding in rupee bonds remained mostly unchanged at Rs. 2.71 billion for the week ending 11 May while the daily secondary market Treasury bond/bill transacted volumes for the first three trading days of the week averaged Rs. 20.28 billion.

In money markets, the total outstanding liquidity deficit increased to Rs. 711.56 billion by the end of the week against its previous weeks of Rs. 708.77 billion while the CBSL’s holding of Gov. Security’s was registered at Rs. 1,911.04 billion against its previous weeks of Rs. 1,869.84 billion. The weighted average rates on call money and repo stood at 14.50% each for the week.

Rupee middle rate at Rs.360

The Central Bank of Sri Lanka was seen introducing a middle rate for the USD/LKR spot contracts on Friday, 13 May at Rs. 360.00 with a plus or minus variation of Rs. 2.60.

The daily USD/LKR average traded volume for the first four trading days of the week stood at $ 8.06 million.

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