Secondary market bond yields dip further as liquidity turns positive

Concerns over money market liquidity eased off yesterday with overnight liquidity reflecting a surplus of Rs. 4.6 billion against last Friday’s net deficit of Rs. 4.7 billion, Wealth Trust Securities said.

It said the Open Market Operations (OMO) department of Central Bank mopped up an amount of Rs. 1 billion from the system on an overnight basis by way of a repo auction at a weighted average of 7.83% while a further Rs. 3.6 billion was deposited at its repo window rate of 7.00%. This intern saw overnight call money and repo rates to average 9.00% and 8.31% respectively.

Wealth Trust also said activity in secondary bond markets remained very high yesterday as the liquid two five-year maturities (i.e. 1 April 2018 and 15 August 2018) closed the day at levels of 10.93/96 and 10.96/11.00 subsequent to hitting intraday lows of 10.90% and 10.95% respectively in early hours of trading on the back of buying interest.

Furthermore demand on the four-year maturity saw it change hands at levels of 11.70% to 11.80% and closed the day at 11.70/77 while the three-year maturity was traded at levels of 10.80%. In secondary market bills, continued buying interest saw the 364-day bill change hands within a range of 11.70% to 11.75%.