Increase in liquidity leads to a dip in secondary market bond yields

Friday, 17 July 2015 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market remained active yesterday as yields were seen dipping considerably following an increase is market liquidity to over a six week high. jdf

Buying interest on the liquid maturities of 1 June 2018, 15 September 2019, 1 May 2020, 1 August 2021, 15 October 2021, 1 October 2022 and 1 September 2023 saw its yields dip to intraday lows of 7.88%, 8.10%, 8.40%, 8.90%, 9.08%, 9.22% and 9.47% respectively against its days opening highs of 8.00%, 8.25%, 8.50%, 9.08%, 9.15%, 9.35% and 9.60%. However profit taking at these levels curtailed any further downward movement.

In secondary bill markets, durations centering the October 2015 maturities were seen quoted within the range of 6.18/22% yesterday.

Meanwhile in money markets, overnight call money and repo rates decreased marginally to average 6.13% and 5.90% respectively as surplus liquidity remained high of Rs. 98.77 b yesterday.

Rupee remains steady

The dollar/rupee rate on spot contracts remained unchanged to close the day at Rs. 133.80 for a fourth consecutive day. The total USD/LKR traded volume for the previous day (15 July) stood at $ 42.33 million.

Some of the forward dollar rates that prevailed in the market were one month – 134.40/55; three months – 135.45/60; and six months – 137.00/15.