Home / Financial Services/ Election keeps market bearish

Election keeps market bearish

Comments / {{hitsCtrl.values.hits}} Views / Monday, 11 November 2019 00:57

  • Foreign investors continue to collect rupee bonds 
  • Total money market liquidity turns negative 

By Wealth Trust Securities

The upcoming Presidential Election kept the secondary bond market on a bearish mode during the week ending 8 November.  

Limited activity was witnessed subsequent to the weekly Treasury bill auction results with yields on the market favourite maturities of 15.09.24 and 15.10.27 increasing marginally to intraweek highs of 10.08% and 10.30%, respectively, against its previous weeks closing levels of 10/05 and 10.27/30. At the auction, the 364-day bill weighted average increased for a second consecutive week by 6 basis points to 8.41%. 

However, yields pulled back from these highs as the said maturities hit lows of 10.03% and 10.28%, respectively, once again on the back of buying interest. In addition, the maturities of 2022s (i.e.15.03.22, 01.07.22 and 01.10.22), 2023s (i.e. 15.03.23, 15.05.23, 15.07.23 and 15.12.23), 2024s (i.e. 15.03.24 and 15.06.24), 01.05.29 and 15.09.34 changed hands within the range of 9.05% to 9.20%, 9.55% to 9.80%, 9.98% to 10.07%, 10.30% to 10.33% and 10.65% to 10.70%. Furthermore, foreign buying interest in rupee bonds continued for a third consecutive week with an inflow of Rs. 1.88 billion for the week ending 6 November.

The daily secondary market Treasury bond/bills transacted volume for the first four days of the week averaged Rs. 8.14 billion. 

In money markets, overall liquidity in the system was seen turning negative once again to record a deficit of Rs.9.57 billion against its previous week’s surplus of Rs.0.79 billion.  

The overnight call money and repo averaged 7.49% and 7.54% respectively for the week as the Open Market Operations (OMO) Department of Central Bank injected liquidity during the week by way of overnight and ten day reverse repo auctions at weighted average yields of 7.55% and 7.65% respectively.  

The average overnight net liquidity surplus in the system stood at Rs.14.71 billion for the week. 


Rupee gains further during the week

In the Forex market, the USD/LKR rate on spot contracts were seen closing the week higher at Rs. 180.45/65 in comparison to its previous weeks closing levels of Rs. 181.05/20, subsequent to trading at high and low of Rs. 179.75 to Rs. 181.05. The daily USD/LKR average traded volume for the first four days of the week stood at $ 77.06 million. Some forward dollar rates that prevailed in the market were one month – 181/30, three months – 182/30, and six months – 183.80/20


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

Peace, business and prosperity

Saturday, 7 December 2019

Every nation, every community and each individual is facing the social and political impact along with the impact of violence. Interpersonal violence results in medical, policing and judicial costs immediately after the violent incident occurs and it

‘Data is the new oil’: An introduction to the proposed Data Protection Act

Friday, 6 December 2019

Data protection is not a concept we, in Sri Lanka, are familiar with. Globally, the laws surrounding data protection have been around for about 20 years. And we are only just about getting started. The proposed ‘Data Protection Act’ (hereinafter

Education: An integral part of entrepreneurship development

Friday, 6 December 2019

Governments across the world have recognised the importance of State intervention to encourage private sector innovation towards strengthening entrepreneurships in order to capitalise on comparative and competitive advantages. The main pillar of entr

Moving away from an insular mindset concerning the tea export business

Friday, 6 December 2019

Sri Lanka mainly produces Orthodox teas as opposed to CTC teas which are largely used in producing tea bags. We are ahead of others in the former category but unfortunately way behind on the latter due to our closed and insular policies. Assuming an

Columnists More