Bond yields continue to trickle down

Tuesday, 18 July 2017 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market remained active yesterday as yields continued to decrease.

Persistent buying interest from both foreign and local participants saw yields on the liquid maturities of 15.12.21, 15.05.23, 01.08.24 and 01.08.26 dip to intraday lows of 10.98%, 11.11%, 11.15% and 11.21% respectively against its previous day’s closing levels of 11.01/04, 11.12/17, 11.16/20 and 11.23/25.

However, profit taking at these levels curtailed the downward movement any further for the day. In addition, yields on the 01.02.18 and 01.05.20 maturities were seen declining to lows of 10.10% and 10.68% as well. Meanwhile in secondary market bills, durations centering November 2017 were seen trading at level of 9.68%.

The total secondary market Treasury bond transacted volume for 14 July was Rs.7.96 billion.

Meanwhile in money markets, liquidity was seen turning a net positive for the first time since the 07th of June 2017 to record a surplus of Rs.16.81 billion. The Open Market Operations (OMO) Department of the Central Bank of Sri Lanka drained out an amount of Rs.10 billion on an overnight basis at a weighted average of 7.34% by way of a repo auction. The overnight call money and repo rates averaged at 8.75% and 8.81% respectively.

Rupee remains mostly unchanged

In Forex markets, the USD/LKR rate on spot contracts was seen closing the day mostly unchanged at Rs.153.70/78 with markets at equilibrium.

The total USD/LKR traded volume for 14 July was $ 40.55 million. Some of the forward USD/LKR rates that prevailed in the market were: one month – 154.80/90; three months – 156.70/80; and six months – 159.65/75.