Secondary market bond yields increase across the board ahead of weekly auction

By Wealth Trust Securities

The secondary bond market witnessed an increasing trend in its yields yesterday on the back of local and foreign selling interest. 

The liquid maturities of the three 2021s (i.e. 01.03.21, 01.08.21 and 15.12.21), 15.05.23 and 01.08.24 saw its yields increase to intraday highs of 10.28% each, 10.25%, 10.54% and 10.56% respectively against its days opening lows of 10.23%, 10.25%, 10.20%, 10.45% and 10.50%. 

In addition, a limited amount of activity was witnessed on the 01.09.28 maturity as well within the range of 10.75% to 10.80%.

Today’s weekly Treasury bill auction will see an total amount of Rs. 30 billion on offer consisting of Rs. 2 billion on the 91 day, Rs. 15 billion on the 182 day and Rs. 13 billion on the 364 day maturities. At last week’s auction, weighted averages on the 182 day and 364 day bills were seen crashing to 17-month lows of 9.15% and 9.48% respectively while the 91-day dipped to 9.03%.The total secondary market Treasury bond transacted volume for 4 August was Rs. 13.71 billion.

The money market net surplus was seen increasing to Rs. 23.79 billion yesterday with the OMO department of Central Bank draining out a volume of Rs. 20 billion by way of an overnight repo auction at a weighted average of 7.33%. Call money and repo continued to remain steady to average 8.70% and 8.77% respectively.

Rupee continues appreciating trend

 The USD/LKR rate on spot contracts was seen appreciating yesterday to Rs. 153.22/28 from its previous weeks closing level of Rs. 153.35/45 on the back of selling interest of the greenback.

The total USD/LKR traded volume for 4 August was $ 32.5 million. Some of the forward USD/LKR rates that prevailed in the market were one month – 153.95/05; three months – 155.55/65; and six months – 158.45/55.