Home / Financial Services/ Bond market gathers momentum during week

Bond market gathers momentum during week

Comments / {{hitsCtrl.values.hits}} Views / Monday, 3 September 2018 00:00


  • Inflation increases
  • Foreign inflow recorded for the first time in 18 weeks

By Wealth Trust Securities

The bond market opened the week ending 31 August on a bearish note, but reversed to a positive note towards the latter part of the week on the back of local and foreign buying interest as yields dipped across the yield curve. 

The liquid maturities of 01.05.20, three 2021’s (i.e. 01.03.21, 01.05.21 and 15.12.21), 15.07.23 and 01.08.24 were seen dipping to weekly lows of 9.30%, 9.50%, each, 9.60%, 9.91% and 10.01%, respectively, against its previous weeks closing levels of 9.25/35, 9.50/56, 9.52/58, 9.67/75, 9.95/99 and 10.08/12.  Furthermore, buying interest on the long end of the curve saw yields on the two 2028’s (i.e. 15.03.28 and 01.09.28) and 15.05.30 dip as well to weekly lows of 10.22%, 10.24% and 10.28%, respectively, against its last week closings of 10.30/40, 10.30/45 and 10.40/70. The positive sentiment was supported by the decrease in weighted averages at the weekly Treasury bill auction, where the 182- and 364-day maturities recorded drops of 6 and 1 basis points, respectively, to 8.03% and 8.99%. However, inflation for the month of August was seen increasing further to 5.9% on the basis of its point-to-point against its previous month 5.4%, while its annualised average remained steady at 5.6%. The foreign holding in rupee bonds recorded an inflow for the first time in 18 weeks to the tune of Rs. 578 million for the week ending 29 August. The daily secondary market Treasury bond/bill transacted volume through the first four days of the week averaged Rs. 7.33 billion

In money markets, the overnight call money and repo rates increased marginally to average at 7.84% and 7.83%, respectively, as the net surplus liquidity in the system fluctuated from a low of Rs. 6.58 billion to a high of Rs. 28.24 billion during the week. The Open Market Operations (OMO) Department drained out liquidity during the week on an overnight basis at weighted averages ranging from 7.56% to 7.95% in addition to mopping up liquidity on a permanent basis by way of term repo auctions at weighted averages ranging from 7.65% to 7.99% for durations ranging from two days to seven days. 

 Rupee depreciates    

In the Forex market, the rupee’s downward trend continued throughout the week as the USD/LKR rate on spot contracts were seen closing the week at Rs. 161.45/50 against its previous weeks closing level of Rs. 160.85/00 on the back of importer demand. 

The daily USD/LKR average traded volume for the first four days of the week stood at $ 60.14 million. 

Some of the forward dollar rates that prevailed in the market were 1 month - 162.20/40, 3 months - 163.80/00, and 6 months - 166.20/40.


Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Why are Sri Lankan passports so bad?

Wednesday, 24 July 2019

My children have two different passports, making them a sort of case study in the stupidity and ultimate cruelty of passports. My daughter has a white passport, so no visas required. My son has a brown passport and he has to prove that he’s not try

Concept of Free Zones and their economic importance

Wednesday, 24 July 2019

With the growth of cross broader international trade, economic liberalisation and relocation of manufacturing facilities to economical location in search of competitive advantages, the concept of Free Zones was born. Free Zones include varieties of F

Howard at the PIM

Wednesday, 24 July 2019

A number of very important people called to thank me for inviting them to the very popular presentation by Dr. Howard Nicholas. It was held on 18 July at the Postgraduate Institute of Management (PIM) auditorium. The title of the presentation was ‘

“Sri Lanka’s future lies in producing exportable manufactured goods”: Dr. Howard Nicholas

Monday, 22 July 2019

Drawing lessons from Vietnam’s experiences The Sri Lanka-born economist attached to The Hague based Institute of Social Studies – Dr. Howard Nicholas – addressing a packed audience consisting of the alumni of the Postgraduate Institute of Manag

Columnists More