Bond market closes year on bullish note

Wednesday, 1 January 2020 00:00 - - {{hitsCtrl.values.hits}}

First bill auction for 2020 in focus
Inflation increases

By Wealth Trust Securities

The secondary bond market was seen closing the year 2019 on a bullish note as yields decreased further on the back of continued buying interest. The yields on the liquid 2023’s (i.e. 15.03.23, 15.07.23 & 15.12.23) and 2024’s (i.e. 15.06.24 & 15.09.24) were seen decreasing further to intraday lows of 9.20%, 9.25%, 9.35% and 9.50% each respectively against its previous day’s closing levels of 9.20/30, 9.27/9.35, 9.40/50, 9.62/68 and 9.62/67. In addition, maturities consisting 01.09.23 and 15.06.27 were seen changing hands at levels of 9.40% and 9.85% respectively as well.

At today’s weekly bill auction, the first for the year 2020, a total amount of Rs. 25 billion will be on offer, consisting of Rs. 2.00 billion of the 91 day maturity, Rs. 9 billion of the 182 day maturity and further Rs. 14 billion of the 364 day maturity. At last week’s auction, the weighted average yield on the 182 day maturity increased by 5 basis points to 8.02% while weighted average yields on the 91 day and 364 day maturities remained steady at 7.51% and 8.45% respectively.

The Point-to-Point inflation for the month of December increased to register 4.8% against 4.4% recorded in November while the annual average increased to 4.3% from 4.1%.

The total secondary market Treasury bond/Bill transacted volume for 30 December 2019 was Rs. 2.56 billion.

In money markets, overnight call money and repo rates averaged at 7.45% and 7.53% respectively as the overnight net liquidity surplus in the system stood at Rs. 37.90 billion.

Rupee appreciates

In the Forex market, the USD/LKR rate on spot contracts was seen appreciating yesterday to close the day at Rs. 181.30/45 against its previous day’s closing levels of Rs. 181.65/75 on the back of selling interest by banks.

The total USD/LKR traded volume for 30 December 2019 was $ 83.11 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 181.75/90; 3 months - 182.70/00 and 6 months - 184.15/40.