Bond market sentiment turns positive

  By Wealth Trust Securities

The sentiment in secondary bond markets turned positive toward the later part of the week with yields declining on the back of fresh buying interest. The yields of the liquid maturities of 15.09.19, 01.03.21, 01.09.23 and the two 2026 maturities (i.e. 01.06.26 and 01.08.26) were seen declining to intraweek lows of 11.50%, 11.84%, 12.15%, 12.42% and 12.44% respectively, as against the  previous weeks closing levels of  11.60/75, 11.88/92, 12.20/35, 12.60/65 and 12.65/75. 

Furthermore, the 2018 maturities and 2025 maturities too were seen changing hands within the range of 11.05% to 11.25% and 12.33% to 12.64% respectively. This led to a parallel downward shift of the overall yield curve during the week.  However, the foreign holding in Rupee bonds was seen dipping for the first time in nine weeks to record an outflow of Rs.768 million for the week ending 03rd August 2016. 

At the weekly Treasury bill primary auction the weighted averages of all three maturities increased with the 91 day bill moving up by 19 bps to 8.99%, the 182 day bill by 21 bps to 9.90% and the 364 day bill by 25 bps to 10.73%.

Meanwhile in money markets, overnight Call money and Repo rates averaged at 8.40% and 8.59% respectively as Liquidity was continuously infused during the week by way of overnight Reverse repo auctions at weighted averages of 8.29% to 8.32% conducted by the Open Market Operations (OMO) Department of Central Bank. Average liquidity in the money the market stood at a net deficit of Rs.46.37 billion. 

Rupee appreciates 

during the week 

The rupee on active one week forward contracts appreciated during the week to close at Rs.145.75/85 against its previous weeks closing levels of Rs.146.15/25, while spot and spot next contracts were seen actively quoted at levels of Rs.145.65/75 and Rs.145.70/85 respectively.

The daily USD/LKR average traded volume for the first four days of the week stood at US $ 65.94 million. 

Some of the forward dollar rates that prevailed in the market were 1 Month - 146.50/60; 3 Months - 148.20/30 and 6 Months - 150.50/60.