Weekly weighted averages decrease

• Secondary market bond yields continue to decline

By Wealth Trust Securities

The weighted average yields at yesterday’s weekly Treasury bill auctions decreased across the board with the 182 day bill recording the sharpest decline of 19 basis points to 7.82%. 

This was closely followed by the 91 day and 364 day maturities by 14 and 16 basis points respectively to 7.27% and 8.32%. The total offered amount of Rs.29 billion was successfully met at the auction as the bids to offer ratio increased to 3.01:1. 

The signing of a $ 500 million loan between the Chinese Development Bank and the Government of Sri Lanka was seen propelling the secondary bond market as yields were seen decreasing for a second consecutive day.  

The market favourite maturities of 01.08.21, 01.10.22, 15.07.23, three 2024s (i.e. 15.06.24, 01.08.24 and 15.09.24) and 15.10.27 saw its yields decreasing to intraday lows of 8.55%, 9.05%, 9.35%, 9.60%, 9.70%, 9.60% and 9.83% respectively against its previous day’s closing levels of  8.70/75, 9.20/25, 9.50/60, 9.75/80 each, 9.80/90 and 9.90/00. 

Furthermore, additional maturities of 2021s (i.e. 15.10.21 and 15.12.21), 2023’s (i.e. 15.05.23, 01.09.23 and 15.12.23) and 2024s (i.e. 01.01.24 and 15.03.24) traded at levels of 8.70% to 8.92%, 9.35% to 9.45% and 9.60% to 9.65% respectively.

The secondary bills witnessed continued buying interest as well, with considerable volume on the maturities of April 2020, May 2020, July 2020, August 2020, October 2020, November 2020, December 2020 and January 2021 changing hands at levels of 7.45%, 7.50%, 7.60% to 7.85%, 8.00%, 8.15%, 8.15% to 8.30%, 8.15% to 8.20% and 8.25% to 8.35% respectively. The total secondary market Treasury bond/bill transacted volume for 17 March was Rs.17.67 billion.  

In money markets, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out an amount of Rs.60.00 billion at a weighted average of 6.76% by way of an overnight repo auction as the overnight net liquidity surplus in the system stood at high of Rs.110.42 billion yesterday. The weighted average yields on overnight call money and repo rates recorded at 6.70% and 6.81% respectively. 

USD/LKR rate dips 

In the Forex market, the USD/LKR rate on spot contracts was traded within the range of Rs. 185.40 to Rs. 185.50 yesterday against its previous days of Rs. 184.80 to Rs. 185.15.

The total USD/LKR traded volume for 17 March was $ 45.75 million. 

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