Secondary Bond market yields creep up

Tuesday, 25 February 2025 01:29 - - {{hitsCtrl.values.hits}}

Rs. 140 b Treasury Bill auction in focus
Rupee steady

By Wealth Trust Securities

The Secondary Bond market yesterday commenced the week with yields edging up on the back of renewed selling pressure. Market activity and transaction volumes were observed at robust levels. This comes ahead of the Rs. 140 billion Treasury Bill auction due today which will be followed in rapid succession by a Rs. 27.50 billion Treasury Bond auction on Thursday.

In Secondary Bonds market, the 15.12.26 maturity was seen trading at the rate of 8.80%. The 01.05.27, 15.09.27 and 15.12.27 maturities were seen trading at the rate of 9.18% to 9.22%, 9.40% and 9.55% respectively while the 15.02.28, 15.03.28, 01.05.28, 01.07.28 and 15.10.28 maturities traded at the rates of 10.00%, 10.05%, 10.10% to 10.13%, 10.22% to 10.24% and 10.34% to 10.37% respectively. The 15.09.29 maturity traded within the range of 10.78%-10.80%. The 15.05.30 and 15.10.30 maturities were seen trading at levels of 11.00% and 11.13%-11.15% respectively.

This comes ahead of the Treasury Bill auction due today, which will have a total amount of Rs. 140 billion on offer, an increase of Rs. 25 billion over the previous week. This will consist of Rs. 25 billion on the 91-day maturity, Rs. 65 billion on the 182-day and Rs. 50 billion on the 364-day maturity.

For reference, at the weekly Treasury Bill auction held last Wednesday (19/02/2025), weighted average yields across all three offered maturities declined for the 11th consecutive week. Accordingly, the weighted average rates on the 91-day tenor dropped by 8 basis points to 7.61%, the 182-day tenor by 4 basis points to 7.90% and the 364-day tenor by 6 basis point to 8.36%. Total bids received exceeded the offered amount by 2.38 times, and the entire Rs. 115 billion on offer was successfully raised in the 1st phase in competitive bidding.

The total secondary market Treasury Bond/Bill transacted volume for 21 February was Rs. 15.77 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.98% and 8.00% respectively.

The net liquidity surplus stood at Rs. 159.65 billion yesterday. Rs. 8.17 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 167.82 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 7.50%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts remained mostly unchanged to close the day at Rs. 295.55/295.90.

The total USD/LKR traded volume for 21 February was $ 75.80 million.

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

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