Tuesday Oct 08, 2024
Tuesday Oct 08, 2024
Wednesday, 2 October 2024 01:04 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The Secondary Bond Market resumed its bullish trajectory yesterday, after a taking a breather the day prior. Yields declined further, driven by renewed buying interest and increased market activity.
The shorter 2026 tenor maturities of 01.02.26, 01.06.26 and 15.12.26 changed hands at the rate of 10.35%, 10.60% and 10.80% respectively. The yield on the 15.12.27 maturity declined from 11.60% to 11.55%. The yields on the 2028 tenors, specifically the liquid 15.02.28 maturity dropped to an intraday low of 11.82%, down from an intraday high of 11.90%. The 01.07.28 maturity traded down from 12.00% to 11.90%. The yield on the popular 15.06.29 maturity declined from 12.00% to 11.95% intraday. Additionally, trades were observed on the 15.05.30 maturity at the rate of 12.25%.
Meanwhile, the secondary bill market yesterday saw December 2024/January 2025 (approx. 3 months) and March 2025 maturities (approx. 6 months) changing hands at the rate of 10.15% to 10.10% and 10.30% respectively. Trades were observed on longer tenor August maturities (approx. 12 months) within the range of 10.05% to 10.00%.
This comes ahead of the Treasury bill auction due today, which will have a total amount of Rs. 142.50 billion on offer, an increase of
Rs. 22.50 billion over its previous week. This will consist of Rs. 65.00 billion on the 91-day, Rs. 67.50 billion on the 182-day and Rs. 10.00 billion on the 364-day maturities.
For context, the last Treasury bill auction conducted last Wednesday (23 Sep.) reflected the enthusiasm in the secondary market and recorded a positive outcome. This saw an end to an eight-week streak of rising weighted average rates prior. Accordingly, the rate on the 91-day tenor held steady at 10.49%, the 182-day tenor dropped by 04 basis points to 10.72% and the 364-day tenor declined by 02 basis points to 10.05%. The bids received exceeded the offered amount by 2 times and the entire Rs. 120.00 billion amount offered was raised successfully at the 1st phase of the auction. The 2nd phase also saw strong demand, with the total market subscription exceeding Rs. 90 billion as against a total offered amount of Rs. 12 billion.
The total secondary market Treasury bond/bill transacted volume for 01 October was
Rs. 10.39 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 8.65% and 8.74% respectively. The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight and 7-day term repo auction for Rs. 24.29 billion and Rs. 75.00 billion at the weighted average rates of 8.46% and 8.87% respectively.
The net liquidity surplus stood at Rs. 7.57 yesterday. An amount of Rs. 2.21 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 9.25% as against an amount of Rs. 109.07 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25%.
Forex Market
In the Forex market, the USD/LKR rate on spot contracts closed the day considerably higher at Rs. 294.75/295.00 against its previous day’s closing level of Rs. 296.10/296.60.
The total USD/LKR traded volume for 30 September was $ 112.45 million.
CORRECTION:
The Colombo Consumer Price Index (CCPI, 2021=100) recorded a deflation of 0.5% in September 2024, for the first time since September 2015.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
