Varied trading in the secondary bond market

By Wealth Trust Securities

The secondary bond market continued to remain active yesterday with yields on the short end of the yield curve trading in opposite directions. Selling interest during morning hours of trading saw yields on the liquid maturities of 01.10.22, 15.07.23 and 15.06.24 increasing to intraday highs of 9.70%, 9.85%, 9.93% respectively against its previous day’s closing levels of 9.50/60, 9.78/80 and 9.86/90. However, considerable buying interest on 2021 maturities saw its yields decline, mainly on the 01.08.21, 15.10.21 and 15.12.21 maturities to intraday lows of 9.15% each and 9.24% respectively. In addition, on the very short end of the curve, the 01.05.20 maturity was seen changing hands at 8.30% as well.

The total secondary market Treasury bond/bill transacted volumes for 3 July was Rs. 20.54 billion. 

In money markets, the OMO Department of the Central Bank of Sri Lanka refrained from conducting any auctions yesterday as the overnight net surplus liquidity in the system stood at Rs. 9.01 billion yesterday. The overnight call money and repo rates averaged 7.81% and 7.89% respectively.

Rupee dips marginally 

In the Forex market, the USD/LKR rate on spot contracts depreciated marginally yesterday to close the day at levels of Rs. 176.10/20 against its previous day’s closing levels of Rs. 176.00/19 on the back of buying interest by Banks.

The total USD/LKR traded volume for 3 July was $ 66.55 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 176.72/82; 3 months - 178.10/20 and 6 months - 180.10/15.