Secondary bond market quiet; yields edge up further

Friday, 6 September 2024 02:56 - - {{hitsCtrl.values.hits}}

Secondary market bills see demand
Rupee appreciates marginally

By Wealth Trust Securities

The secondary bond market yesterday saw yields edge up albeit on thin transaction volumes and sparse activity as market participants were seen taking a wait-and-see approach amidst the prevailing uncertainty stemming from the upcoming election.

Accordingly, only selected maturities were seen trading. The 15.12.27 maturity was observed changing hands at the rate of 12.20%. The 15.02.28, 01.07.28 and 15.12.28 at the rates of 12.60%, 12.90% and 13.00%-13.01% respectively.

In contrast, the secondary bill market was moderately active. Shorter tenor bills maturing in September were seen changing hands at the rate of 9.10%. Similarly, December 2024 (approximately three months) March 2025 (approximately six months) were seen trading at the rates of 9.60% to 9.70% and 9.95% on the back of sizeable volumes.

The total secondary market Treasury bond/bill transacted volume for 4 September was Rs. 62.05 billion.

In money markets, the weighted average rate on overnight call money was at 8.53% and repo was at 8.72%.

The net liquidity surplus stood at Rs. 88.86 billion yesterday as an amount of Rs. 108.86 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25%.

Further, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 20.00 billion at a weighted average rate of 8.50%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts appreciated marginally to close the day at Rs. 298.80/298.90 against its previous day’s closing level of Rs. 298.90/299.00.

The total USD/LKR traded volume for 4 September was $ 48.03 million.

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

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