Sporadic activity in the bond market ahead of Auctions

By Wealth Trust Securities

The secondary bond market witnessed limited activity only on the 15.12.22 and 15.01.33 maturities at levels of 8.80% and 13.03% to 13.05% respectively yesterday ahead of today’s Bond auctions.

The bond auctions due today will see a total volume of Rs. 50 billion on offer, consisting of Rs. 20 billion of a 15.06.2027 maturity and Rs. 30 billion of a 01.12.2031 maturity. At the auctions conducted on 28th January 2022, a total amount of Rs. 41.39 billion was successfully taken up against a total offered amount of Rs. 50 billion. 

The weighted average yields were recorded at 11.49% and 12.45% for the maturities of 01.08.2025 and 15.01.2033 respectively while the 2nd phase of the auction was opened for the 01.08.2025 maturity. A direct issuance window was opened for the 15.01.2033 maturity as it was fully subscribed at its first phase.  

Meanwhile, the overnight net liquidity deficit in the money market remained above Rs. 500 billion yesterday for a second consecutive day to record at Rs. 503.96 billion. Nevertheless, the weighted average rates on overnight Call money and REPO remained steady at 6.48% and 6.50% respectively as an amount of Rs. 630.72 billion was withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 6.50%.

However, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 62.03 billion by way of overnight repo auction at a weighted average rate of 6.49% as well. Furthermore, an amount of Rs. 64.73 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 5.50%.

The total secondary market Treasury bond/bill transacted volume for 9 February was Rs.  62.81 billion.   

Forex market 

The overall market remained inactive yesterday.

The total USD/LKR traded volume for 9 February was $ 87.15 million.   

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