Foreign buying interest returns to bond market

By Wealth Trust Securities

Activity in the secondary bond market increased marginally yesterday with the return of foreign buying interest. 

Yields of the 01.08.2021 and 01.08.2024 maturities dipped to daily lows of 12.16% and 12.40% respectively against its opening highs of 12.25% and 12.45%. Furthermore, on the short end of the yield curve, the 01.06.2018 maturity was seen changing hands at 11.05% while on the long end, the 01.09.2028 and 15.05.2030 maturities traded within the range of 12.60% to 12.66%. This was ahead of today’s weekly bill auction, where a total amount of Rs. 28 billion will be on offer, consisting of Rs. 10.0 billion of the 91 day, Rs. 11 billion of the 182 day and Rs. 7 billion of the 364 day maturities. At last week’s auction, the weighted averages increased across all three maturities to 8.97%, 9.89% and 10.31% respectively. Given below are the closing, secondary market yields for the most frequently traded maturities. 

In money markets, the overnight call money and repo rates averaged 8.36% and 8.53% respectively as the OMO Department of the Central Bank of Sri Lanka drained out an amount of Rs. 93.37 billion on an overnight basis by way of a Repo auction at a weighted average rate of 7.50%. The net surplus liquidity stood at Rs. 98.96 billion.

Spot contracts become active

In Forex markets, the USD/LKR rate on the two week and one month forward contracts remained steady for the second consecutive day to close at Rs. 150.50/60 and Rs. 150.95/05 while spot contracts were seen actively quoted at Rs. 150.15/20.

The total USD/LKR traded volume for 16 January 2017 was $ 150.32 million.

Given below are some forward USD/LKR rates that prevailed in the market. 3Months-              152.40/50 and 6 Months             - 154.60/70