Home / Financial Services/ Bull Run in bond market continues; foreign buying returns

Bull Run in bond market continues; foreign buying returns


Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 17 April 2018 00:00


By Wealth Trust Securities

The Bull Run witnessed in the secondary bond market during the previous week continued, as yields declined further, reflecting a parallel shift downwards of the overall yield curve, with considerable buying pressure from both foreign and local investors.

This downward trend was supported by the decline in yields at the weekly bill auction, where the weighted average yield of the 364 day maturity dropped by 20 bps followed by the successful launch and pricing of a Sri Lankan dollar-denominated sovereign bond issue for $ 2.5 billion at 5.75% and 6.75% respectively for a period of five and ten years. In the meantime foreign buying too returned to the market with an inflow of Rs. 3.92 billion for the week ending 11 April, reversing outflows witnessed over the previous two weeks. 

The largely traded maturities were the 15.03.23, 01.08.24 and 01.09.28, as their yields dipped to weekly lows of 9.75%, 9.95%, and 10.10% respectively, against highs of 10.07%, 10.20% and 10.35%. Furthermore, the 01.03.21, 01.08.26 and 15.05.30 maturities too were seen changing hands at lows of 9.61%, 9.95% and 10.25%. However, profit taking at these levels curtailed any further downward movement with the market closing marginally higher.

The daily secondary market Treasury bond/bill transacted volumes for the first three days of the week averaged Rs. 12.19 billion.

In money markets, the overnight call money and repo rates decreased to average 7.89% and 7.94% respectively, as the average surplus liquidity in the system increased to Rs. 21.21 billion. In the meantime, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka continued to infuse liquidity by way of reverse repo auctions at weighted average yields of 8.15% and 8.16% respectively for periods of 6 and 7 days. 

Rupee losses during the week

The rupee closed the week lower at Rs. 155.70/80, against its previous weeks closing level of Rs. 155.35/45 on the back of importer demand.  

The daily USD/LKR average traded volume for the first three days of the week stood at $ 93.57 million. 

Some of the forward dollar rates that prevailed in the market were: 1 Month - 156.32/42; 3 Months - 157.90/00 and 6 Months - 160.20/35.


The secondary market yields for the most frequently traded maturities.

Treasury Bills

91 Day Bills –8.25 / 8.50

182 Day Bills –8.60 / 8.90

364 Day Bills –9.45 / 9.55

Treasury Bonds  

 15/09/19    -       9.50 / 9.60

01/05/20     -      9.55 / 9.65

01/03/21     -      9.60 / 9.65

01/10/22     -      9.75 / 9.85

15/03/23     -      9.80 / 9.85

01/08/24     -      9.95 / 10.05

01/08/25     -      9.95 / 10.10

01/08/26     -      9.95 / 10.05

15/06/27     -    10.00 / 10.10

01/09/28     -    10.10 / 10.15

15/05/30     -    10.20 / 10.30

15/01/33     -    10.20 / 10.40 

 


Share This Article


DISCLAIMER:

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.

COMMENTS

Today's Columnists

Top Cola brand crashing globally; lesson for Sri Lanka

Friday, 20 July 2018

We have heard the age old adage, if a brand is not in line to the trends of a customer, they will cease to exist over time.


Religion and politics: a tale of two hypocrisies

Friday, 20 July 2018

It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness; it was the epoch of belief,


Sri Lanka’s Trade Information Portal – Bringing local traders one step closer to the global market

Friday, 20 July 2018

Sri Lanka’s traditional lacework famously known as Beeralu is slowly moving into the spotlight of the global fashion industry


Building great organisations: What will it take in the future?

Friday, 20 July 2018

I would like to begin by congratulating the Great Place to Work Institute for organising this event to recognise ‘Sri Lanka’s Best


Columnists More