Secondary bond market activity dries up

By Wealth Trust Securities

Secondary bond market activity contracted yesterday with thin volumes seen changing hands mainly on the liquid two five year maturities (i.e. 1 April 2018 and 15 August 2018). Yields on these two maturities closed the day mostly unchanged at levels of 11.12/15 and 11.16/19 respectively while the relatively illiquid two five year maturities (i.e. 1 February 2018 and 15 July 2018) was seen changing hands at levels of 11.17% to 11.18% as well. In addition the 364 day bill was seen changing hands at levels of 10.85% once again.

In money markets yesterday, overnight call money and repo rates remained steady to average 8.56% and 8.24% respectively as surplus liquidity dipped marginally to Rs. 10.032 b. The Open Market Operations (OMO) department of Central Bank drained an amount of Rs. 9.5 b from the system at a weighted average of 7.75% by way of an overnight repo auction. In addition a further amount of Rs. 5 b was mopped up by way of outright sales of Treasury bills at a weighted average of 8.56% for a period of 35 days, value dated today.