Activity increases as secondary market bond yields fluctuate

By Wealth Trust Securities

The secondary bond market saw yields declining in the morning hours of trading yesterday following the news of the release of $ 162 million as the second tranche under the IMF three-year program with Sri Lanka coupled with the announcement of the outright purchase of Treasury bills by the OMO department of the Central Bank. 

Buying interest on the 15.09.2019, 01.09.2023, 01.08.24 and 01.08.2026 maturities saw their yields declining to daily lows of 11.60%, 12.58%, 12.68% and 12.69% respectively against the previous day’s closing levels of 11.70/10, 12.75/80, 12.80/90 and 12.85/95. Nevertheless, selling interest towards the latter part of the day saw yields increase once again mainly on the 01.08.24 and 01.08.26 maturities to intraday highs of 12.85% and 12.84% respectively. 

In addition, a limited amount of activity was witnessed on the 01.08.25 maturity within the range of 12.80% to 12.85% as well.

In money markets, the OMO department of the Central Bank was seen injecting a total amount of Rs. 4.00 billion by way of four outright purchase of Treasury bills at weighted average rates of 8.75%, 8.90%, 9.00% and 8.75% for 24, 31, 38 and 59 days respectively. 

The overnight call money and repo rates remained mostly unchanged to average 8.44% and 8.62% respectively as the Open Market Operations (OMO) department of the Central Bank injected a further amount of Rs. 20.00 billion on an overnight basis by way of a Reverse Repo auction at a W. Avg of 8.50%. The net deficit in the market stood at Rs. 45.02 billion.

Rupee appreciates marginally

  In Forex markets yesterday the USD/LKR rate on spot next contracts appreciated marginally to close the day at 148.55/65 against its previous day’s closing levels of 148.70/80.  The total USD/LKR traded volume for 18 November 2016 was $ 39.85 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month - 149.35/45; three months - 151.30/40 and six months - 153.75/85.