Trading week commences on a bullish note; Bond yields continue to head south

By Wealth Trust Securities

The fresh trading week commenced from where it left off the previous week, as secondary market bond yields continued to decrease on the back of persistent buying interest, driven by the 364-day bill cut-off rate held steady at 5.18% for a fifth consecutive week at its upcoming auction on Wednesday.

The volumes changing hands increased, mainly on the liquid maturities of 2022’s (i.e. 01.10.22 and 15.12.22), 2023’s (i.e. 15.07.23 and 15.11.23), 01.12.24 and 01.05.25 as its yields hit intraday lows of 5.57%, 5.58%, 6.10%, 6.19%, 6.58% and 6.88% respectively, against its previous trading day’s closing level of 5.55/60, 5.60/62, 6.15/20, 6.25/28, 6.60/70 and 6.92/97. In addition, maturities of 15.11.22, other 2023’s (i.e. 15.01.23, 15.03.23 and 15.12.23) and 2026’s (i.e. 15.01.26 and 01.02.26) changed hands at level of 5.60%, 5.65%, 5.80%, 6.27% and 7.30% to 7.36% respectively as well. In secondary bills, 30 July 2021 maturity changed hands at a level of 5.02%.

The total secondary market Treasury bond/bill transacted volume for 13 May was Rs. 3.27 billion.   

In the money market, overnight net surplus liquidity decreased to Rs. 114.39 billion yesterday, against its previous days of Rs. 130.56 billion, while the weighted average rates on overnight call money and repo remained steady at 4.66% and 4.70% respectively.

USD/LKR   

The Forex market continued to remain inactive yesterday. The USD/LKR rate on spot contracts traded at a level of Rs. 199.99 yesterday.

The total USD/LKR traded volume for 13 May was $ 14.13 million.   

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