Debt market makes positive strides with maiden 30-year bond auction

In a move that will help Sri Lanka’s Treasury bond markets by way of developing its long-term yield curve, the Public Debt Department (PDD) of Central Bank yesterday successfully auctioned its first-ever 30-year bond maturity.

Wealth Trust Securities said an amount of Rs. 3 billion was accepted at the auction at a weighted average of 12.50% from bids of Rs. 6 billion received.

In line with this activity in secondary bond markets picked up yesterday, mainly on the two liquid five-year maturities and eight-year maturity as the former closed the day flat at levels of 11.09/12 and 11.15/17 respectively while yields on the latter dipped towards the latter part of the day to 11.50/53 against its opening levels of 11.62/65.

Furthermore market participants were seen keenly waiting today’s inflation figures due for the month of May. In April the point to point decreased to 6.4% from 7.5% while the annualised average remained unchanged at 8.8%.

Wealth Trust Securities also said the overnight call money and repo rates remained steady to average 9.00% and 8.32% respectively as surplus liquidity in money markets increased further to Rs. 9.98 billion yesterday.

The Central Bank continued to refrain from conducting any Open market Operation (OMO) auctions for a 10th straight day.

Meanwhile in Forex markets the USD/LKR rate remained steady for a second consecutive day within the range of Rs. 126.45-48. The total USD/LKR volume for the previous day (29 May) stood at US$ 68.96 million.