Secondary market bond yields continue to decrease ahead of weekly bill auction

By Wealth Trust Securities

The secondary bond market remained active yesterday, with yields decreasing for a second consecutive day. 

The two seven-year maturities (i.e. 01.01.24 and 01.08.24) dropped to daily lows of 11.45% each against the previous day’s closing levels of 11.45/53 and 11.45/50 respectively, while the yields of the two six-year maturities (i.e. 15.05.23 and 01.09.23) dropped to lows of 11.40% and 11.43%, as against 11.40/45 and 11.45/50. The nine-year maturity of 01.08.26 reduced to a low of 11.49% as against 11.50/55 the previous day. Furthermore, the four-year maturity of 01.08.21 changed hands within the range of 11.30% to 11.32%. At today’s auction, a total of Rs. 30.5 billion will be on offer consisting of Rs. 15.5 billion of the 182-day maturity, Rs. 11.0 billion of the 364-day maturity and Rs. 4.0 billion of the 91-day maturity. At last week’s auction, the weighted average yield of the 364-day and 182-day bills declined by 11 and 4 basis points respectively to 10.50% and 10.30% while the weighted average yield of the 91-day remained steady at 9.60%.

The total secondary market Treasury bond transacted volume for 19 June 2017 was Rs. 4.21 billion. Meanwhile, in money markets, the overnight call money and repo rates averaged 8.75% and 8.83% respectively as the OMO (Open Market Operations) Department of the Central Bank of Sri Lanka was seen injecting an amount of Rs. 16.47 billion on an overnight basis by way of a Reverse Repo auction at a weighted average of 8.75%. The net liquidity shortage decreased marginally to Rs. 24.74 billion.

Rupee losses further 

The USD/LKR rate on spot contracts depreciated further to close the day at levels of Rs. 153.25/40 against its previous day’s closing levels of Rs. 153.15/20 on the back of importer demand.

 The total USD/LKR traded volume for 19 June 2017 was $ 74.45 million.