Secondary bond market remains active; yields edge up further

• Rs. 170 b T-bill auction in focus

By Wealth Trust Securities

The secondary bond market remained active yesterday as yields continued to edge up. Trades were seen on the liquid maturities of the two 2026’s (15.05.26 & 01.08.26) and 15.09.27 from intraday lows of 14.35% and 14.25% respectively to highs of 15.00% and 14.40%. However, buying interest at these levels curtailed any further upward movement. In addition, buying interest on 2025 maturities (01.06.25 & 01.07.25) saw its yields dip from an intraday high of 15.25% to 14.75%.

In secondary market bills, November/December 23 maturities traded at levels between 17.40% to 17.95% and March 2024 traded at a level of 15.25%.

The total secondary market Treasury bond/bill transacted volume for 18th September 2023 was Rs. 14.98 billion.

Today’s weekly Treasury bill auction will have in total an amount of Rs. 170 billion on offer which will consist of Rs. 70 billion on the 91-day maturity, Rs. 60 billion on the 182-day maturity and a further Rs. 40 billion on the 364-day maturity. Last week’s auction (held on 13.09.23) saw its total offered amount of Rs. 160 billion fully taken up at the 1st phase of the auction while a further amount of Rs. 38.55 billion was taken up at its 2nd phase. Weighted average yields reduced across the board to 18.16%, 15.19% and 13.35% on the three maturities respectively. 

In money markets, the weighted average rates on overnight call money and Repo stood at 11.47% and 11.85% respectively while the net liquidity deficit stood at Rs. 76.99 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight repo auction for Rs. 22.83 billion at a weighted average rate of 11.37% while an amount of Rs. 54.17 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 12.00%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day at Rs. 324.00/325.00 against its previous day’s closing level of Rs. 324.00/324.40.

The total USD/LKR traded volume for 18 September was $ 24.17 million. 

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