Bond yields dip further ahead of inflation

Friday, 30 June 2017 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market yields were seen decreasing further yesterday with the liquid maturities of 15.05.23, 01.08.24 and 01.08.26 hitting intraday lows of 11.35%, 11.42% and 11.49% respectively on the back of continued local and foreign buying.

This was ahead of the inflation announcement for the month of June, due today. Inflation for the month of May decreased for a second consecutive month to record 6.00% on its point to point while its annualized average increased for a fifth consecutive month to 5.40%.

The total secondary market Treasury bond transacted volume for 28 June was Rs. 8.49 billion.

In money markets, overnight call money and repo rates averaged at 8.75% and 8.94% respectively as the Open Market Operations (OMO) department of Central Bank injected an amount of Rs. 39.17 billion at a weighted average of 8.74% by way of an overnight reverse repo auction. The net market deficit reduced to Rs. 40.31 billion yesterday.

Downward trend in rupee continues

The USD/LKR rate continued to slide yesterday on the back of importer demand to close the day at Rs. 153.50/60 on its spot contracts against its previous day’s close of Rs.153.43/50.

The total USD/LKR traded volume for 28 June was $ 100.25 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 154.55/65; three months – 156.60/80; six months – 159.45/80.

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