Secondary bond market activity continues on positive note

By Wealth Trust Securities

Activity in the secondary bond market remained high yesterday as yields decreased in morning hours of trading driven by the positive liquidity position in the money market. Buying interest on the short end to the belly end of the curve saw yields on the 01.07.19, 01.03.21, 01.10.22 and 15.03.23 dip to intraday lows of 9.40%, 9.90%, 10.25% and 10.30% respectively against its previous day’s closing levels of 9.40/50, 9.93/96, 10.23/33 and 10.30/35. However, profit taking at these levels saw yields increase marginally towards the latter part of the day while the maturities of 15.09.19, 15.12.20, 01.05.21, 01.08.21 and 15.10.25 were seen changing hands at levels of 9.60%, 9.85%, 10.00% each and 10.50% respectively as well.

The total volume of Treasury bonds/bills transacted in the secondary market on 13 July was Rs.6.36 billion.

In money markets, the OMO Department of the Central Bank of Sri Lanka, in order to drain out liquidity from the system, was seen conducting an overnight Repo auction yesterday for the first time since 30 May as the net liquidity position stood at surplus of Rs.21.27 billion. The auction drained out an amount of Rs.16.22 billion at a weighted average rate of 7.82%. The overnight repo rate decreased to average 8.29% while overnight call money rate averaged at 8.50%.

Rupee losses further

In the Forex market, the USD/LKR rate on the spot contract depreciated further yesterday to close the day at Rs.159.85/95 against its previous day’s closing levels of Rs.159.60/70 on the back of continued importer dollar demand.

The total USD/LKR traded volume for 13 July was $83.00 million.

Some forward USD/LKR rates that prevailed in the market: 1 Month - 160.70/90; 3 Months - 162.30/60; 6 Months - 164.70/00.