Bond markets close the week on a bullish note

Monday, 30 June 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The sentiment in secondary bond markets closed the week ending 27th June on a bullish note as buying interest from mid-week onwards showed signs of yields dipping further.

Activity continued to remain high with the 01.07.2019 and 01.04.2018 maturities being the pick of the yield curve, followed by the three year maturity of 15.05.2017. These maturities were seen dropping as much as 11 basis points, 9 basis points and 13 basis points to weekly lows of 8.62%, 8.16% and 7.53% before moving up marginally to close the week at 8.62/64, 8.15/18 and 7.52/54 triggered by profit taking. Furthermore, the shorter maturities of 01.11.2015 and 01.04.2016 as well as the longer tenures of 15.08.2018, 01.05.2021 and 01.07.2022 were seen changing hands within weekly highs of 7.10%, 7.25%, 8.34%, 9.36%, 9.78% and lows of 7.03%, 7.16%, 8.24%, 9.24% and 9.74%. Similar to bond yields, Treasury bills too witnessed continuous demand, as the weighted average of the 364 day bill declined further, to break the psychological level of 7.00%. Meanwhile in money markets, overnight call money and repo rates remained steady throughout the week to average 6.97% and 6.53% respectively with average surplus liquidity standing at Rs.19.22 billion. The Open Market Operations (OMO) Department of Central Bank continued to mop up liquidity during the week by way of 3 to 77 day term repo auctions at weighted averages ranging from 6.61% to 6.84%. Rupee loses ground during the week The USD/LKR rate depreciated marginally during the week to close at levels of Rs 130.34/35, against the previous weeks closing levels of Rs 130.27/30 as a result importer demand. The daily average USD/LKR traded volume for the first four days of the week was US $ 64.11 million. Some of the forward dollar rates that prevailed in the market were: 1 Month -130.76; 3 Months -131.62 and 6 Months -132.75.