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Monday, 6 July 2020 00:01 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The secondary market bond yields were seen fluctuating within a narrow range during the week ending 3 July, before closing marginally lower on a week on week basis.
Selling interest on the first trading day of the week saw yields increase on the liquid maturities of 15.12.22, 15.01.23, 15.09.24, 01.05.25, 01.02.26 and 15.10.27 to intraweek highs of 5.84%, 6.06%, 6.63%, 6.65%, 6.80% and 6.96% respectively against its previous weeks closing levels of 5.80/90, 5.90/00, 6.50/60, 6.63/73, 6.80/90 and 6.95/05. 
However, renewed buying interest subsequent to the outcome of the primary Treasury bond auctions saw yields decrease once again with said maturities hitting lows of 5.75%, 5.88%, 6.38%, 6.55%, 6.69% and 6.90% respectively.
At the weekly bill auctions, the weighted average rates decreased across the board by 42, 31 and 21 basis points on the 91 day, 182 day and 364 day bills respectively to 5.08%, 5.22% and 5.45% with the 364 day bill weighted average dipping below the Standard Deposit Facility Rate (SDFR) for the first time since February 2015. The bond auctions conducted last Monday recorded impressive weighted averages of 5.86% and 6.97% on the 15.12.22 and 15.08.27 maturities respectively.
The foreign holding in rupee bonds recorded an outflow for a third consecutive week to the tune of Rs .5.1 billion for the week ending 1 July.
The daily secondary market Treasury bond/bill transacted volumes for the first four days of the week averaged Rs. 13.76 billion.
In money markets, the weighted average yields on overnight Call money and Repos averaged 5.52% and 5.55% respectively for the week as the overall market liquidity dipped marginally to Rs. 160.02 billion against Rs. 185.35 billion recorded the previous week.
Rupee appreciates further during the week
In the Forex market, the Rupee on its spot contracts appreciated during the week to hit a high of Rs. 185.85 before closing the week at levels of Rs. 185.80/90 in comparison to its previous weeks closing levels of Rs. 186.25/35 on the back of continued selling interest by Banks.
The daily USD/LKR average traded volume for the first four days of the week stood at $ 101.33 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
