Bond yields continue to dip

By Wealth Trust Securities

The secondary bond market remained active yesterday as yields dipped across the curve on the back of continued buying interest. 

Yields on the liquid maturities of 01.03.21, 15.10.21, 15.12.21 and 15.07.23 were seen dipping to intraday lows of 11.30%, 11.37%, 11.40% and 11.60% respectively in morning hours of trading. 

However, profit taking at these levels saw yields edge up to daily highs of 11.38%, 11.40%, 11.50% and 11.70% while buying at these levels curtailed in further upward movement to close the day lower against its previous day’s closings. 

In addition, the 01.08.26 and 15.06.27 maturities were seen changing hands at levels of 11.73% to 11.80% and 11.75% respectively.

The total secondary market Treasury bond/bill transacted volumes for 12 October was Rs.8.35 billion. 

In the money market, the net liquidity shortfall stood at Rs.18.92 billion yesterday with call money and repo averaging 8.45% and 8.39% respectively. 

The OMO department of Central Bank was seen infusing liquidity by way of an overnight and a seven day term repo auction for successful amounts of Rs.4.15 billion and Rs.2.75 billion respectively at weighted averages of 8.31% and 8.37%. 

A further amount of Rs.31.5 billion was injected by way of 14 day term repo auction at weighted average rate of 8.37%, valued today.

Rupee dips once again

The rupee on its spot contract was seen closing the day lower at Rs.170.50/70 against its previous day’s closing of Rs.169.40/60 on the back of renewed importer demand. 

The total USD/LKR traded volume for 12 October was $ 87.55 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 171.60/00; three months – 173.80/20; six months – 176.85/35.