Bond yields decrease further ahead of weekly bill auctions

By Wealth Trust Securities

The secondary bond market remained active yesterday with yields decreasing further ahead of today’s weekly Treasury bill auctions. Yields on the liquid maturities of 01.10.22, 15.01.23, 2024’s (i.e. 15.03.24, 15.06.24 & 15.09.24) and 01.05.25 were seen changing hands at lows of 7.45%, 7.80%, 8.37%, 8.40%, 8.37% and 8.54% respectively against its previous day’s closing levels of  7.60/65, 7.88/90, 8.37/45, 8.40/46, 8.43/48 and 8.58/60. In addition maturities of 2021s (i.e. 01.08.21 & 15.12.21), 2023s (i.e. 15.07.23, 01.09.23 & 15.12.23), 01.01.24 and 2025s (i.e. 15.03.25 & 01.08.25) were seen changing hands at levels of 7.05%, 7.20%, 7.97% to 8.00%, 7.95% to 7.97%, 8.05% to 8.10%, 8.26%, 8.57% and 8.60% respectively. 

In secondary bills, September 2020, December 2020 and January 2021 maturities changed hands at levels of 6.73%, 6.85% and 6.86% respectively.  At today’s Treasury bill auction, a total amount of Rs. 30 billion will be on offer, consisting of Rs. 8 Billion on the 91 day, Rs. 6 Billion on the 182 day and Rs. 16 billion on the 364 day maturities. At last week’s auction, the weighted average yields of the 91 day and 364 day bills decreased by 03 and 01 basis points respectively to 6.71% and 6.93% while the weighted average yield of the 182 day bill remained steady 6.83%. 

The total secondary market Treasury bond/bill transacted volume for 22 May was Rs. 11.86 billion. 

In money markets, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka refrained from conducting any auction yesterday as the overnight net liquidity surplus in the system increased to Rs. 94.46 billion. The weighted average rates on overnight call money and repo recorded at 5.89% and 5.93% respectively.

Rupee loses marginally 

The USD/LKR rate on spot contracts depreciated marginally yesterday to close the day at level of Rs. 186.10/30 against its previous day’s closing levels of Rs. 185.60/80 on the back of buying interest by Banks.

The total USD/LKR traded volume for 22 May was $ 40.80 million.  

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