Secondary bond market gathers momentum

• Liquidity increases to over two-week high

 By Wealth Trust Securities

The secondary bond market witnessed increased activity yesterday as its yields were seen increasing in the morning hours of trading mainly on the 01.08.2024 and 01.08.2026 maturities to daily highs of 13.10% and 13.18% respectively. 

However, buying interest at these levels during the latter part of the day saw yields ease off once again to 13.05% and 13.10% as volumes changing hands increased. In addition, on the short end of the yield curve, 2018 maturities (i.e. 15.10.18 & 15.11.18) and 2019 maturities (i.e. 15.01.19 & 01.07.19) were seen changing hands within the range of 11.60% to 11.83% and 12.07% to 12.25% respectively as well.

Furthermore, significant buying interest on August and September 2017 treasury bills saw it trading at levels of 10.28% to 10.30% as well. 

The net deficit in money markets was seen decreasing to over a two-week low of Rs. 17.72 billion yesterday as call money and repo averaged 8.50% and 8.61% respectively. The OMO Department of the Central Bank infused an amount of Rs. 11.00 billion at a weighted average of 8.49%, by way of an overnight reverse repo auction. 

Rupee dips marginally 

The rupee on active two-week and one-month forward contracts depreciated marginally yesterday to close the day at levels of Rs. 151.85/00 and Rs. 152.40/50 respectively against its previous day’s closing levels of Rs. 151.65/80 and Rs. 152.25/40 on the back of continued importer dollar demand.The total USD/LKR traded volume for 1 March was $ 109 million. Some of the forward USD/LKR rates that prevailed in the market were three months - 154.75/90 and six months - 157.15/30.