Secondary bond market yields decrease

• Liquidity increases to a 29-day high
• Rupee gains below Rs. 185 for first time since March 2020

By Wealth Trust Securities

The fresh trading week commenced on a positive note yesterday as yields were seen decreasing on the back of renewed buying interest towards the latter part of the day. 

The yields of the liquid maturities of 2022s (i.e. 15.11.22 and 15.12.22), 15.01.23, 01.05.25, 15.08.27 and 15.05.30 were seen decreasing to intraday lows of 5.84%, 5.88%, 5.90%, 6.53%, 7.03% and 7.35% respectively against its previous day’s closing levels of 5.82/90, 5.88/95, 5.90/00, 6.55/60, 7.08/15 and 7.30/40. 

In addition, maturities of 01.09.23, 15.09.24, 01.02.26 and 15.10.27 traded at levels of 6.12%, 6.30%, 6.65% and 7.09% to 7.10% respectively as well. In the secondary bill market, October and November 2020 bills were traded at levels of 4.62% to 4.70% while January 2021 maturities traded within the range of 4.80% to 4.85%. The total secondary market Treasury bond/bill transacted volumes for 7 August was Rs. 3.27 billion.   In money markets, surplus liquidity was seen increasing to a 29-day high of Rs. 182.34 billion yesterday while call money and repo recorded weighted averages of 4.53% and 4.55% respectively. 

Rupee appreciates below Rs. 185

In the Forex market, USD/LKR rate on spot contracts were seen appreciating considerably yesterday to hit a high of Rs. 184.72 for the first time since March 2020 on the back of selling interest by banks. It closed the day at Rs. 184.70/77 against its previous day’s closing level of Rs. 185.22/27. 

The total USD/LKR traded volume for 7 August was $ 89.60 million.  

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