Upward momentum in secondary bond market yields continue

Tuesday, 11 September 2018 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The selling interest mainly on the 15.12.21 and 15.06.27 maturities led to its yields increasing and in turn saw two-way quotes on the rest of the yield curve increasing as well in choppy trading yesterday.

The said two maturities were seen hitting intraday highs of 9.72% and 10.37% respectively against its previous day’s closing levels of 9.65/70 and 10.25/30 while the maturities of the two 2020s (i.e. 01.05.20 and 15.12.20), 01.03.21, 15.07.23 and two 2026’s (i.e. 01.06.26 and 01.08.26) inched higher to levels of 9.32% to 9.39%, 9.53% to 9.55%, 10.00% to 10.02% and 10.25% to 10.30% respectively as well. In the secondary bill market, the 22nd February 2019 maturity changed hands at levels of 8.40%.

The total secondary market Treasury bond/bill transacted volumes for 7 September was Rs.4.83 billion.

In the money market, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka refrained from conducting any auctions yesterday as the net surplus liquidity decreased to Rs.15.77 billion. The overnight call money and repo rates averaged at 7.88% and 8.01% respectively.

Rupee losses

The USD/LKR rate on spot contracts depreciated yesterday to close the day at Rs.162.35/50 against its previous day’s closing levels of Rs.162.00/20 on the back of continued importer demand.

The total USD/LKR traded volume for 7 September was $ 43.67 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 163.15/45; three months – 164.65/95; six months – 167.15/45.