Rs. 120 b bond auctions bullish on short tenures

By Wealth Trust Securities 

The Treasury bond auctions conducted yesterday recorded positive responses mainly on the short tenures at its 1st and 2nd phases, with the entire offered amount on the 2026 and 2028 durations being fully taken up. The total bids received exceeded the total offered amount by 2.08 times. The 01.02.2026 maturity recorded a weighted average rate of 13.83%, a decline of 3 basis points since it was previously offered on 12 December 2023, while the 15.03.2028 recorded a weighted average rate of 14.21%, unchanged from the previous auction held on 12 December 2023 as well. The weighted average on the 15.05.30 maturity also remained unchanged at 14.22%, however only Rs. 25.98 billion was raised out of an offered amount of Rs. 30 billion.

As a result, only Rs. 115.98 billion or 96.65% was accepted in total against a total offered amount of Rs. 120 billion. 

The secondary bond market witnessed two-way quotes edging down post-auction, with a resurgence in buying interest, after remaining relatively quiet prior. Prior to the auction, the maturities of 15.09.27, 15.03.28 and 15.05.30 traded at 14.15% each, while post-auction saw the 15.05.26 maturity trade at 13.90%. 

The total secondary market Treasury bond/bill transacted volume for 10 January was Rs. 29.57 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 9.10% and 9.74% respectively as the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight and 31-day term reverse repo auction for Rs. 27.60 billion and Rs. 34 billion at weighted average rates of 9.13% and 10.71% respectively.

The net liquidity deficit stood at Rs.42.66 billion yesterday with as amount of Rs. 15.66 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 10.00% against an amount of Rs. 0.60 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 9.00%. 

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day at Rs. 322.55/322.65 against its previous day’s closing level of Rs. 322.80/322.90. 

The total USD/LKR traded volume for 10 January was $ 61.83 million. 

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