Upward trend in secondary bond market yields persist amidst thin volumes
Tuesday, 25 June 2013 10:38
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By Wealth Trust Securities
The upward trend of bond yields in the secondary market continued yesterday as well, with the two liquid five year maturities (i.e. 01.04.2018 & 15.08.18) hitting a six month high of 11.70% on the back of thin volumes. However buying interest at these levels curtailed further upward movement as yields dipped once again to close the day marginally lower at levels of 11.61/64 and 11.66/70 respectively. This was further backed by the success of the Sri Lanka Development Bond (SLDB) auction where an amount of US $ 254 million was accepted against its initial offered amount of US $ 75 at very competitive weighted averages in comparison to its previous issues. In the meantime the quotes of the eight year maturity remained unchanged at levels of 11.80/82 while the 364 day bill closed the day at levels of 10.80/85. Most market participants were seen staying on the sidelines awaiting this week’s Treasury bill auction results and Inflation figures for the month of June which is due later this week.
In yesterday’s money markets the average overnight call money and repo rates continued to remain steady at 8.54% and 8.12% respectively despite overnight surplus liquidity dipping to Rs 9.28 Bn. The Open Market Operations (OMO) department of the Central Bank drained an amount of Rs.8.18 Bn from the system at a weighted average of 7.76% by way of an overnight Repo auction while a further Rs 1.10 Bn was deposited at its repo window rate of 7.00%.
