Secondary market bond yields decrease further

By Wealth Trust Securities

The secondary market bond yields were seen continuing its declining trend yesterday with yields on the liquid maturities of two 2024s (i.e.15.06.24 and 15.09.24) and 15.09.34 declining to intraday lows of 10.20%, 10.25% and 10.81% respectively against its previous day’s closing levels of 10.25/30, 10.31/35 and 10.90/95. In addition, the 15.12.21 and 01.10.22 maturities were seen changing hands at levels of 9.10% and 9.25% respectively as well.

The total secondary market Treasury bond/bill transacted volume for the 18 September was Rs. 18.25 billion. 

In the money market, the Open Market Operations (OMO) department of Central Bank planned to inject liquidity for a total amount of Rs. 12 billion by way of outright purchases of Treasury bonds for maturities of 01.06.20 and 01.08.20, valued today. Nevertheless, all bids received for the auction were rejected.

However, it was seen draining out liquidity from the system yesterday by way of an overnight repo auction for the first time since 30 July 2019, as the overnight net liquidity surplus stood at of Rs. 47.90 billion. An amount of Rs. 20.92 billion was drained out at the auction at a weighted average rate of 7.35%. The overnight call money and repo rates averaged 7.42% and 7.52% respectively.

LKR continues to lose

In the Forex market, continued buying interest by banks and a globally strengthening dollar saw the USD/LKR rate on spot contracts depreciating further to close the day at Rs. 180.95/05 against its previous day’s closing levels of Rs. 180.70/80.

The total USD/LKR traded volume for the 18 September 2019 was $ 67.33 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 181.45/75; three months - 182.50/80 and six months - 184.15/45