Activity moderates during the week; yields close steady

Monday, 15 March 2021 04:23 - - {{hitsCtrl.values.hits}}

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Primary auctions go undersubscribed

By Wealth Trust Securities

The trading activity in the secondary bond market dried up during the short trading week ending 12 March, subsequent to both primary auctions getting undersubscribed.

The weekly Treasury bill auction saw only an amount Rs.34.74 billion accepted in total against its total offered amount of Rs. 45 billion while the three Treasury bond auctions saw Rs. 54.36 billion accepted in total against an offered total of Rs. 60 billion.

The limited activity during the week centred on the maturities of 2022s (i.e. 01.10.22 and 15.12.22), 2023s (i.e. 15.07.23 and 01.09.23), 2024s (i.e. 15.09.24 and 01.12.24) and 2026s (i.e. 15.01.26 and 01.02.26) within the range of 5.70% to 5.85%, 6.15% to 6.20%, 6.50% to 6.62% and 7.00% to 7.05% respectively while yields closed the week broadly steady against its previous weeks closing levels.

In the secondary bill market, April, May, June, July, August and September 2021 maturities and January 2022 maturities traded at levels of 4.68%, 4.90% to 5.02% and 5.10% respectively.

The foreign holding in rupee bonds remained steady at Rs. 6.98 billion for the week ending 10 March 2021.

The daily secondary market Treasury bond/bill transacted volumes for the first three trading days of the week averaged Rs. 19.20 billion.

In money markets, the weighted average rates on overnight call money and repo remained mostly unchanged to average 4.55% each for the week while the total outstanding market liquidity increased further to Rs. 181.37 billion in comparison to its previous week of Rs. 172.82 billion. The CBSL’s holding of Gov. Security’s increased by Rs. 8.24 billion to Rs. 810.04 billion.

USD/LKR

In Forex markets, the USD/LKR rate on the more active one-week forward contracts were seen depreciating marginally during the week to close the week at Rs. 197.25/197.75 in comparison to its previous weeks closing level of Rs. 196.50/197.00.

The daily USD/LKR average traded volume for the first three days of the week stood at $ 66.02 million.

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