Secondary bond market yields decrease marginally ahead of weekly bill auction

By Wealth Trust Securities

The secondary market bond yields were seen decreasing marginally yesterday on the back of moderate trading. 

The 2021 maturities (i.e. 01.03.21, 01.05.21 and 01.08.21) were the most traded duration with their yields hitting intraday lows of 9.90%, 10.00% and 9.97% respectively against its previous day’s closing levels of 9.93/98, 10.03/05 and 10.00/10. 

In addition, limited trades of the 01.08.24 and two 2025’s (i.e. 15.03.25 and 01.08.25) maturities took place at levels of 10.21%, 10.30% to 10.32% and 10.32%, while two way quotes along the rest of the yield curve were seen decreasing as well. In the secondary bill market, the 364 day bill was seen changing hands at levels of 9.60%.

At today’s weekly Treasury bill auction, a total amount of Rs.25.5 billion will be on offer consisting of Rs.4.0 billion on the 91 day, Rs.7.5 billion on the 182 day and Rs.14 billion on the 364 day maturities. 

At last week’s auction, the weighted average yields continued to increase with the 364 day bill reflecting an increase of 7 basis points to 9.66%. All bids received for the 91 day and 182 bills were rejected for a second consecutive week.

The total secondary market Treasury bond/bill transacted volumes for 12 March was Rs.1.59 billion.

In money markets, the overnight call money and repo rates averaged at 8.13% and 7.62% respectively as the net surplus liquidity in the system remained high at Rs.29.40 billion. 

The OMO (Open Market Operations) Department of the Central Bank of Sri Lanka drained out an amount of Rs.15.35 billion on an overnight basis by way of a Repo auction at a weighted average of 7.28%.

Rupee closes stronger   

The USD/LKR rate on spot contacts dipped to a low of Rs.155.80 during the early part of the day against its previous day’s closing levels of Rs.155.60/65 before closing the day stronger at Rs.155.65/70.

The total USD/LKR traded volume for 12 March was $ 50.35 million.

Some of the forward USD/LKR rates that prevailed in the market were: one month – 156.50/65; three months – 158.15/30; and six months – 160.70/85.