Secondary bond market sentiment turns bearish

•  Rupee continues to appreciate

By Wealth Trust Securities

The secondary bond market yesterday saw increased activity. However, sentiment turned negative as the upcoming presidential election, shrouded in political uncertainty, draws near. As such, yields were observed registering a notable uptick.

Accordingly, the 15.05.26 and 01.08.26 maturity was seen trading at 11.00% and 11.05% respectively. The 2028 tenors saw a notable jump in yields, with the rate on the 15.02.28 and 15.03.28 increasing from intraday lows of 12.45% to a high of 12.60%. The 01.07.28 maturity followed suit, increasing from 12.70% to 12.85% intraday, as compared to a low of 12.45% hit earlier this week. The 15.06.29 maturity was also observed trading up at 12.85%, against a low of 12.70% earlier in the week. Additionally, the medium tenor 15.05.30 and 15.10.30 maturities were seen trading within the range from 13.00% to 13.14%, while the 01.07.32 maturity was seen trading up from 13.25% to 13.35%.

The total secondary market Treasury bond/bill transacted volume for 28 August was Rs. 17.39 billion.

In money markets, the weighted average rate on overnight call money was at 8.52% and repo was at 8.74%.

The net liquidity surplus stood at Rs. 102.69 billion yesterday as an amount of Rs. 127.69 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. 25.00 billion at a weighted average rate of 8.47%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts appreciated further to close the day at 

Rs. 300.00/300.30 against its previous day’s closing level of Rs. 300.60/300.80

The total USD/LKR traded volume for 28 August was 

$ 94.40 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond 

trading platform, Money 

broking companies)