Secondary market bond yields continue to decrease

Friday, 20 July 2018 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The yields in the secondary bond market continued its decreasing trend across the yield curve yesterday on the back of continued local buying interest amidst an increase in activity. The liquid three 2021’s maturities (i.e. 01.03.21, 01.05.21 and 01.08.21), 01.10.22, 15.03.23, 01.08.24 and 15.10.25 were seen dipping to intraday lows of 9.73%, 9.82% each, 10.05%, 10.14%, 10.22% and 10.30%, respectively, against its previous day’s closing levels of 9.75/83, 9.82/88, 9.80/90, 10.10/15, 10.18/22, 10.25/30 and 10.35/42. In addition, the maturities of 01.07.19, 15.09.19, 01.05.20, 15.12.20, 15.10.21, 15.12.21, 15.06.27 and 01.09.28 changed hands at levels of 9.25%, 9.35%, 9.60%, 9.70%, 9.90% to 10.05%, 9.90%, 10.50% and 10.50% to 10.54% as well. Meanwhile, in the secondary bill market, May and June 2019 maturities changed hands within the range of 9.20% to 9.25%.

The total volume of Treasury bonds/bills transacted in the secondary market on 18 July was Rs. 11.03 billion. In money markets, the OMO (Open Market Operations) Department of the Central Bank drained out an amount of Rs. 7 billion on an overnight basis by way of a repo auction at a weighted average of 8.12% as the net surplus in the system stood at Rs. 11.18 billion, yesterday. The overnight call money and repo rates remained steady to average at 8.49% and 8.33% respectively.

Rupee dips marginally

In the Forex market, the USD/LKR rate on the spot rate dipped marginally to close the day at Rs. 159.95/10 against its previous day’s closing levels of Rs. 159.95/00 on the back of importer demand. The total USD/LKR traded volume for the 18 July was $ 49.25 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 160.75/00; 3 Months - 162.35/55 and 6 Months - 164.70/00.