Secondary bond market rallies; sentiment turns positive

Monday, 17 February 2025 05:08 - - {{hitsCtrl.values.hits}}

Primary auctions record impressive outcomes
Total outstanding market liquidity surges
Rupee strengthens

By WealthTrust Securities

The bullish outcome at both the Treasury bond and bill primary market yields saw sentiment turn positive in the secondary bond market during the week ending 14 February 2025.

The primary auctions during the week saw the weighted averages on the 01.09.28 and 15.10330 Treasury bonds decrease to 10.31% and 11.23% respectively while the Treasury bill averages dipped as well to 7.69%, 7.94% and 8.42% on the 91-, 182- and 364-day maturities respectively. The entire offer amounts were successfully raised in competitive bidding while an amount of Rs. 3.75 billion was raised at the Direct Issuance Window on the 01.09.28 maturity and further Rs. 7.11 billion on the one-year tenor.

In secondary bonds market, the yield on the 15.12.26 maturity dropped down to trade at a low of 9.00%. The 15.02.28 and 15.03.28 maturities were observed trading down the ranges of 10.15%-10.08% and 10.15%-10.10% respectively. The medium tenor 01.07.28 and 15.10.2028 maturities dropped from intraweek highs to lows of 10.38%-10.25% and 10.40%-10.33% respectively. The 15.12.28 maturity was seen dropping from intraweek highs to lows of 10.47%-10.40%. The 15.09.29 maturity saw its yield decline down from an intraweek high of 10.85% to touch low of 10.80% while the 15.10.30 maturity saw its yield drop from an intraweek high of 11.28% to a low of 11.20%.

The foreign holding in Rupee Treasuries recorded a very marginal net inflow of Rs. 23.00 million for the week ending 13 February 2025, as a result the total holding notched up to Rs. 77.98 billion.

The daily secondary market Treasury bond/bill transacted volumes for the first three days of the week averaged at

Rs. 34.48 billion.

In money markets, the total outstanding liquidity surplus increased to Rs. 175.09 billion as at the week ending 14 February 2025, from Rs. 144.29 billion recorded the previous week. The weighted average interest rates on call money and repo were recorded within the ranges of 7.99%-8.00% and 8.00%-8.06% respectively.

The Central Bank of Sri Lanka’s (CBSL) holding of Government Securities was registered at Rs. 2,511.92 billion as at 14 February 2025, unchanged from the previous week’s closing level.

Forex market

In the Forex market, the USD/LKR rate on spot contracts was seen appreciating notably, to close the week at Rs. 295.40/295.70 as against its previous week’s closing level of Rs. 297.00/297.50 and subsequent to trading at a high of Rs. 295.20 and a low of Rs. 298.45.

The daily USD/LKR average traded volume for the first three trading days of the week stood at $ 66.73 million.

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

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.