Upward momentum in bond yields continues for third consecutive day

By Wealth Trust Securities    

The upward momentum in secondary bond market yields continued yesterday as the liquid maturities of 15.07.23, 2024s (i.e.15.06.24 and 15.09.24) and 15.10.27 were seen hitting intraday highs of 9.10%, 9.45% each and 9.70% respectively against its previous day’s closing levels of 9.00/10, 9.30/35 each and 9.48/55. 

In addition, maturities of 01.05.20, 15.12.21, 15.03.23, 15.03.25 and 15.06.27 changed hands at levels of 7.50%, 8.85%, 9.15%, 9.40% and 9.65% respectively. 

In the secondary bill market, May 2020, June 2020, July 2020, August 2020 and January 2021 maturities traded at levels of 7.30% to 7.35%, 7.65%, 7.95% to 7.98%, 8.08% and 8.43% to 8.45% respectively.

The total secondary market Treasury bond/bill transacted volume for 5 February was Rs. 8.57 billion. 

Meanwhile, in money markets, overnight call money and repo rates averaged 6.97% and 7.02% respectively as the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka injected an amount of Rs. 6.4 billion on an overnight basis by way of a Reverse Repo auction at a weighted average rate of 6.96%. It further injected an amount of Rs. 4 billion for Standalone Primary Dealers by way of an overnight reverse repo auction at a weighted average rate of 7.09%.

The overnight net liquidity surplus in the system stood at Rs. 15.74 billion yesterday. 

Rupee remains mostly unchanged

 In the Forex market, the USD/LKR rate on spot contracts remained mostly unchanged yesterday to close the day at Rs. 181.35/40, subsequent to trading within the range of Rs. 181.30 to Rs. 181.39 

The total USD/LKR traded volume for 5 February was $ 72.80 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 181.85/95; three months – 182.80/00; six months – 184.35/55. (References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, money broking companies.)