Secondary bond market yields dip for a second consecutive week

Tuesday, 9 September 2014 00:01 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The downward trend in secondary bond market yields witnessed during the previous week was seen continuing during the week ending 5 September, fuelled by the news of the NSB dollar bond issue and the steadying of yields at the weekly Treasury bill auction.

The liquid maturities of 1 July 2019, 1 May 2021 and 1 July 2022 saw their yields dipping to intraweek lows of 7.28%, 7.88% and 7.98% respectively against its previous weeks closing levels of 7.75/85, 8.30/37 and 8.40/50.

However, profit taking at these levels saw yields increasing once again to close the week at levels of 7.35/40, 7.90/00 and 8.04/08 respectively. Furthermore, maturities consisting of 1 April 2018, 15 August 2018, 1 January 2024 and 1 January 2029 were actively traded within the range of 7.16% to 7.35%, 7.25% to 7.40%, 8.15% to 8.25% and 9.13% to 9.25% respectively.

However, trading activity seemed to moderate towards the latter part of the week with market participants awaiting news of various funding agreements to coincide with the visits by the Chinese President and Japanese Prime Minister. In money markets, overnight call money and repo rates remained steady to average 6.70% and 6.52% as average surplus liquidity in the system increased to Rs. 51.06 billion against its previous week’s average of Rs. 43.35 billion. Rupee closes week steady The rupee closed the week steady at Rs. 130.20/22 subsequent to hitting a weekly high of Rs. 130.17. The daily average USD/LKR traded volume for the first four days of the week ending 5 September was at $ 57.38 million. Given are the closing forward dollar rates that prevailed in the market: one month – 130.63; three months –131.32; six months – 132.33.