Secondary market bond yields increase ahead of weekly Treasury bill auction

By Wealth Trust Securities 

Renewed selling interest in the secondary bond market saw yields on the liquid maturities of the three 2021’s (i.e. 01.03.21, 01.08.21 and 15.12.21), 15.05.23, 01.08.24 and 01.09.28 increasing yesterday to intraday highs of 10.46%, 10.60%%, 10.50%, 10.86%, 10.80% and 11.03% respectively as against its previous day’s closing levels of 10.30/40, 10.40/50, 10.28/38, 10.70/80, 10.65/75 and 10.90/00.

Meanwhile, today’s bills auction will have on offer a total amount of Rs. 28 billion consisting of Rs. 15 billion of the 182 day maturity and a further amount of Rs. 13 billion of the 364 day maturity. The 91 day bill will not be on offer for the first time in 14 weeks. At last week’s auction, weighted averages of the 182 day and 364 maturities decreased by 14 and 10 basis points respectively to 9.02% and 9.38% while the weighted average of the 91 day maturity decreased by 16 basis points to 8.87%.

The total secondary market Treasury bond transacted volume for 14 August was Rs. 4.54 billion.

In money markets, the downward trend in overnight call money and repo rates continued yesterday as the net surplus liquidity in the system stood at Rs. 18.19 billion yesterday. The Open Market Operations (OMO) Department of the Central Bank of Sri Lanka drained out an amount of Rs. 0.001 billion on an overnight basis at a weighted average of 7.28%. Call money averaged 8.56% while repo averaged 8.45%.

Rupee dips marginally 

The USD/LKR rate on spot contracts depreciated marginally yesterday to close the day at Rs. 153.15/25 against its previous day’s closing levels of Rs. 153.10/15, on the back importer demand.

 The total USD/LKR traded volume for 14 August was $ 23.75 million.