Yields on 2023 maturities continue to trickle down; weekly bill auction in focus

Wednesday, 4 August 2021 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market activity continued around the 2023 durations, consisting of the 15.01.23, 15.07.23, 01.09.23 and 15.11.23 maturities as its yields dipped to trade at levels of 5.72% to 5.75%, 6.02% to 6.05%, 6.13% to 6.15% and 6.32% to 6.33% respectively. In addition, 2022 maturities (i.e. 01.10.22 & 15.12.22) traded at levels of 5.65% to 5.70% as well. In secondary bills, September 2021 maturities changed hands at levels of 5.14% to 5.15% respectively.

At today’s bill auction, Rs. 46 billion will be on offer, consisting of Rs. 18 billion on the 182-day maturity and Rs. 14 billion each on the 91-day and the 364-day maturities. The stipulated cut-off rate on the 364-day maturity was increased by two basis points to 5.28%, while the maximum yield rates of the 91-day and 182-day maturities will be decided below the level of the 364-day maturity at the auction. At last week’s auction, the weighted average rate on the 182-day bill reflected an increase of one basis point to 5.22%, while weighted average rates on the 91-day and 364-day maturities remained steady at 5.22% and 5.25% respectively.

The total secondary market Treasury bond/bill transacted volume for 2 August 2021 was Rs. 5.23 billion.

In money markets, the weighted average rates on overnight call money and repo remained mostly unchanged at 5.11% and 5.16% respectively, as the overnight net liquidity surplus was registered at Rs. 56.50 billion yesterday. An amount of Rs. 152.26 billion was deposited at Central Banks SDFR (Standard Deposit facility Rate) of 4.50% against an amount of Rs. 95.76 billion being withdrawn from Central Banks SLFR (Standard Lending facility Rate) of 5.50%.

USD/LKR

In Forex markets, the overall market continued to remain inactive yesterday.

The total USD/LKR traded volume for 2 August was $ 28.10 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)