Secondary market bond yields dip for the first time in over three weeks

Liquidity increases to over a three-week high

By Wealth Trust Securities 

Secondary market bond yields were seen dipping yesterday, reversing an upward trend witnessed since 30 September 2016, on the back of buying interest returning to the market. 

Yields on the two 2018 maturities (15.10.2018 and 15.11.2018), 15.09.2019, 01.05.2020, 01.03.2021, 01.08.2024 and 01.08.2026 were seen dipping to intraday lows of 11.05%, 11.44%, 11.60%, 11.68%, 11.80% and 11.82% respectively against its days’ opening highs of 11.10%, 11.50%, 11.65%, 11.75%, 11.85% and 11.90%. In addition, two way quotes on the rest of the yield curve was seen dipping as well.

Given below are the closing, secondary market yields for the most frequently traded maturities,

The net liquidity shortfall in the system was seen dipping to Rs. 22.60 billion yesterday, a level last seen on 29 of September 2016, which led to the overnight repo average dipping to 8.67% while call money remained stagnant at 8.42%. The Open Market Operations (OMO) department of the Central Bank injected an amount of Rs. 26 billion by way of a reverse repo auction at a weighted average of 8.50%. 

Rupee slides once again

 In forex markets, the USD/LKR rate on the spot next contract was seen dipping to Rs. 147.90/00 yesterday against its opening high of Rs. 147.55/65 on the back of importer demand. The total USD/LKR traded volume for 21 October 2016 was $ 57.25 million. Given below are some forward USD/LKR rates that prevailed in the market.