Secondary bond market yields continue to decrease

Friday, 22 May 2020 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The Sustained buying interests on the back of continuous bond buy back auctions by the DOD (Domestic Operations Department) of Central Bank led to secondary market bond yields decreasing further yesterday.

The liquid maturities of 01.10.22, 15.01.23, 2024s (i.e. 15.03.24, 15.06.24 and 15.09.24), 01.05.25 and 15.10.27 saw its yields hit intraday lows of 7.70%, 7.95%, 8.45%, 8.48%, 8.47%, 8.58% and 8.82% respectively against its previous day’s closing levels of 7.80/85, 8.00/05, 8.47/55, 8.50/57 each, 8.65/70 and 8.85/92. However, profit taking subsequent to the buyback auction results saw yields edge up marginally once again, trimming its decline. In secondary bills, October 2020, December 2020 and April 2021 maturities changed hands at levels of 6.77% to 6.79%, 6.81% and 6.89% to 6.92% respectively.

The total secondary market Treasury bond/bill transacted volume for 20 May was Rs. 23.6 billion. In money markets, the DOD (Domestic Operations Department) of Central Bank conducted another round of auctions for outright purchases of Treasury bonds on the similar maturities of 15.03.24, 15.06.24 and 15.09.24 and injected a total successful volume of Rs. 0.55 billion at weighted averages of 8.42%, 8.45% and 8.48% respectively, valued today. A further injection of Rs. 10 billion for 05 days drew no bids as the overnight net liquidity surplus in the system decreased to Rs. 92.87 billion yesterday. The weighted average rates on overnight call money and repo stood at 5.91% and 5.96% respectively.

LKR appreciates further

In the Forex market, the USD/LKR rate on spot contracts was seen appreciating further yesterday to close the day at Rs.186.55/70 against its previous day’s closing levels of Rs. 187.00/20 on the back of continued selling interest by banks. The total USD/LKR traded volume for 20 May was $ 56.87 million.

References:

Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, money broking companies