Secondary Bond market yields stable; activity moderate

Thursday, 5 December 2024 00:01 - - {{hitsCtrl.values.hits}}

Rs. 192.50 b T-bill auction fully subscribed; rates broadly steady
Rupee appreciates slightly

By WealthTrust Securities

The secondary Bond market yesterday saw yields hold broadly steady, with the notable exception being the 2027 tenors, which saw concentrated buying interest push rates lower. Trading activity and transaction volumes continued to be observed at moderate levels as the market was seen going through a consolidation phase.

The 15.12.26 maturity was seen trading within the range of 9.45%-9.43%. The 01.05.27, 15.09.27, and 15.10.27 maturities saw yields decline from intraday highs to lows of 10.17%-10.15%, 10.25%-10.15%, and 10.30%-10.22%, respectively. The 15.02.28, 01.05.28, and 01.07.28 maturities were seen trading at the rates of 10.51%-10.48%, 10.60%-10.53%, and 10.60%, respectively. The 15.09.29 maturity was observed changing hands within the range of 10.95%-10.90% and the 01.12.31 maturity within the range of 11.40%-11.43%.

At the weekly Treasury bill auction conducted yesterday, weighted average rates were seen holding broadly steady.

Accordingly, weighted average rates remained unchanged on the 91-day tenor at 8.73% and the 364-day tenor at 9.08%. However, the weighted average yields on the 182-day tenor declined by three basis points to 8.94%.

Total bids received exceeded the offered amount by 2.09 times, and the entire Rs. 192.50 billion on offer was successfully raised in the first phase. The second phase of subscription for the auction will be opened on the 91 and 364-day tenors at the weighted average rates until close of business of the day prior to settlement (i.e., 4 p.m. today).

The total secondary market Treasury bond/bill transacted volume for 3 December was Rs. 10.99 billion.

In money markets, the weighted average rates on overnight call money and repo stood at 8.13% and 8.36%, respectively.

The DOD (Domestic Operations Department) of the Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 10 billion at the weighted average rate of 8.16%.

The net liquidity surplus stood at Rs. 222.08 billion yesterday. Rs. 0.23 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 232.31 billion was deposited at the Central Bank’s SDFR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 closed the day appreciating slightly to Rs. 290.40/290.50 against its previous day’s closing level of Rs. 290.50/290.55.

The total USD/LKR traded volume for 3 December was $ 66.35 million.

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

companies)

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