Secondary bond market yields consolidate

• Rupee continues to depreciate

By Wealth Trust Securities

The secondary bond market yesterday saw yields consolidate with secondary market two-way quotes closing broadly steady apart from 2028 tenors saw a further uptick in rates. Transaction volumes and market activity were seen at moderate levels.

Accordingly, the 15.09.27 and 15.12.27 maturities were seen trading at the rates of 10.00% and 10.06% respectively. The 15.02.28, 15.03.28, 01.07.28, 15.10.28 and 15.12.28 maturities were seen trading at the rates of 10.20%, 10.25%, 10.40% to 10.53% and 10.50% each respectively. The 15.09.29 and 15.12.29 traded up the range of 10.80-10.85% collectively. The 15.03.31 maturity traded within the range of 11.10%-11.15%.

This comes ahead of the Treasury bill auction due today, which will have a total amount of Rs. 80 billion on offer, a decrease of Rs. 60 billion over the previous week. This will consist of Rs. 30 billion on the 91-day maturity, Rs. 30 billion on the 182-day and Rs. 20 billion on the 364-day maturity.

For reference, at the weekly Treasury bill auction held last Wednesday, weighted average yield rates were seen increasing across the board for the first time in 20 weeks. Accordingly, the weighted average rate on the 91-day tenor increased by 9 basis points to 7.59%, the 182-day tenor by 7 basis points to 7.91% and the 364-day tenor by 6 basis point to 8.31%. The auction went undersubscribed for a second consecutive week, as only 55.73% or Rs 78.02 billion was accepted in total of the total Rs. 140 billion amount offered. This was despite total bids received exceeding the offered amount by 1.30 times.

The total secondary market Treasury bond/bill transacted volume for 7 April was 

Rs. 16.45 billion.

The net liquidity surplus stood at Rs. 190.88 billion yesterday. 

Rs. 0.20 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of 

Rs. 190.90 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 7.50%.

The weighted average rates on call money and repo were registered at 7.94% and 7.96% respectively.

Forex market 

In the forex market, the USD/LKR rate on spot contracts closed the day depreciating to Rs. 299.75/300.25 as against 

Rs. 297.70/298.20 the previous day.

The total USD/LKR traded volume for 7 April was $ 55.63 million.

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