Secondary market yields dip marginally ahead of Treasury Bond auctions

By Wealth Trust Securities

Secondary market Bond yields closed the day marginally lower in comparison to their previous day’s closing levels subsequent to increasing during the morning hours of trading. 

Selling interest during the morning hours of trading saw yields on the liquid maturities of 1 August 2021, 1 July 2022, 1 September 2023, 1 January 2024 and 15 March 2025 increase to intraday highs of 8.46%, 8.56%, 8.80%, 8.93% and 8.98% respectively. 

However, considerable buying interest from this point onwards saw yields dip once again to hit intraday lows of 8.40%, 8.54%, 8.75%, 8.84% and 8.85% respectively as volumes changing hands remained high. In addition, a limited amount of activity was witnessed on the 1 June 2018, 15 September 2019 and 1 May 2020 maturities within the range of 7.60% to 7.63%, 7.98% to 8.01% and 8.18% to 8.20% respectively.

This was ahead of today’s Treasury Bond auctions, the second for the week for an total amount of Rs. 12 billion consisting of Rs. 2 billion on a 4.10 year maturity of 15 May 2020, Rs. 3 billion on a 7.03 year maturity of 1 October 2022 and Rs. 7 billion on a 9.09 year maturity of 15 March 2025. The previous auctions conducted earlier this week for the similar maturities fetched weighted averages of 8.11% and 8.56% respectively while all bids were rejected for the 15 March 2025.

Meanwhile in money markets yesterday, overnight call money and repo rates remained steady to average at 6.11% and 5.84% respectively as surplus liquidity stood at Rs. 86.80 billion.  

Rupee remains steady

The USD/LKR rate on spot contracts remained steady at Rs. 133.80 yesterday while the three months forward contract stood at Rs.135.60/90 as volumes traded remained moderate.  The total USD/LKR traded volume on 10 June 2015 stood at $ 100.18 million.