Bond market activity moderates ahead of T-Bill auctions

By Wealth Trust Securities

The final trading day for the month of June saw activity in the secondary bond market moderate considerably yesterday, ahead of today’s weekly Treasury bill auctions. Limited trades were witnessed consisting of the maturities of 15.12.22, 15.01.23, 15.09.24 and 01.05.25 at levels of 5.81% to 5.83%, 5.90% to 5.91%, 6.45% to 6.48% and 6.60% to 6.65% respectively. In secondary bills, October 2020 maturities changed hands within the range of 5.10% to 5.20%.

This was ahead of the weekly Treasury bill auctions due today, where a total amount of Rs. 29 billion will be on offer consisting of Rs. 2 billion on the 91 day maturity, Rs. 9 billion on the 182 day maturity and further Rs. 18 billion on the 364 day maturity. At last week’s auction, the weighted average yields decreased across the board by 80, 77 and 96 basis points respectively to 5.50%, 5.53% and 5.66%.

Inflation (CCPI) for the month of June decreased for a fourth consecutive month to 3.9% on the basis of its point to point against its previous month 4.0% while its annual average remained steady at 4.7%.

The total secondary market Treasury bond/bill transacted volume for 29 June was Rs. 9.67 billion.  

In money markets, the weighted average rates on overnight call money and repo remained steady at 5.52% and 5.55% respectively as the DOD (Domestic Operations Department) of Central Bank continued to refrain from conducting any auction. The overnight net liquidity surplus in the system stood at Rs. 177.75 billion yesterday.

Rupee losses marginally  

In Forex markets, the USD/LKR on spot contracts were seen losing marginally yesterday to close the day at Rs. 186.20/30 against its previous day’s closing days of Rs. 186.15/25 on the back of buying interest by Banks.

The total USD/LKR traded volume for 29 June was $ 103.25 million.  

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)