Bond yields seesaw during the day

Friday, 10 May 2019 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary market bond yields fluctuated yesterday, increasing during morning hours of trading and decreasing once again towards the latter part of the day. Selling interest saw yields hit intraday highs of 10.62% and 11.02% on the liquid two maturities of 15.03.24 and 01.05.29 respectively before rebounding to intraday lows of 10.52% and 10.95%.

In addition, the maturities of 2021’s (i.e. 01.08.21 & 15.12.21), 15.03.22, three 2023’s (i.e. 15.05.23, 15.07.23 and 01.09.23) and two 2026’s (i.e. 01.06.26 and 01.08.26) were seen changing hands at levels of 9.85% to 9.90%, 10.00% to 10.01%, 10.40% to 10.42% and 10.80% respectively as well. On the very short end of the curve, the 01.07.19 and 01.11.19 maturities were seen changing hands at levels of 8.60% and 9.10% respectively while continued demand for bills saw the latest 364 bill dip to a low of 9.15%.

The total secondary market Treasury bond/bill transacted volumes for 8 May was Rs. 21.90 billion.

In money markets, the overnight call money and repo rates averaged 8.38% and 8.52% respectively as the Open Market Operations (OMO) Department of the Central Bank was seen draining out an amount of Rs. 20.00 billion on an overnight basis by way repo auction at a weighted average of 8.38%. Furthermore, the OMO department drained out amounts of Rs. 13.00 billion and Rs. 1.00 billion on a four day and seven day basis respectively at weighted averages of 8.55% and 8.50% as the net surplus liquidity in the system stood at a high of Rs. 51.55 billion yesterday.

Rupee losses marginally

The USD/LKR rate on spot contracts depreciated marginally once again to close the day at levels of Rs. 175.60/80 against its previous day’s closing levels of Rs. 174.90/10 on the back of buying interest by banks.

The total USD/LKR traded volume for 8 May was $ 93.41 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 176.55/95; 3 months - 178.40/80 and 6 months - 181.00/50.