Secondary bond market remains active as yields fluctuate

Tuesday, 25 July 2017 00:29 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Secondary bond market yields were seen fluctuating yesterday on the back of upcoming Treasury bond auctions.

Selling interest during the morning hours of trading saw yields of the 15.12.21, 15.05.23, 01.08.24 and the 01.08.26 maturities increase to intraday highs of 10.73%, 10.85% each and 10.90% respectively against its previous day’s closing levels of 10.62/66, 10.78/82, 10.80/82 and 10.83/88. DFT-15

However, buying interest at these levels resulted in yields dipping once again to close the day at levels of 10.64/66, 10.78/83, 10.80/85 and 10.85/90.

Furthermore, the 01.08.21 and the 01.01.24 maturities changed hands at levels of 10.67% to 10.71% and 10.84% to 10.87% respectively. The total secondary market Treasury bond transacted volume for 21 July 2017 was Rs. 8.02 billion. In money markets, the OMO Department (Open Market Operations) of the Central Bank was seen conducting yet another auction for the outright sale of Treasury bills.

The auction drained out an amount of Rs. 8 billion today at a weighted average of 9.16% for a period of 45 days. The overnight call money and repo rates remained mostly unchanged to average 8.71% and 8.70% respectively as the net surplus liquidity stood at Rs. 10.87 billion. The OMO Department also mopped up a further amount of Rs. 2.40 billion on an overnight basis by way of a repo auction at a weighted average rate of 7.31%.

Rupee appreciates

The USD/LKR rate on spot contracts appreciated yesterday, to close the day at Rs. 153.57/67 on the back of export conversions, as against the previous day’s closing levels of Rs. 153.70/75.

The total USD/LKR traded volume for 21 July 2017 was $ 96.80 million. Some of the forward USD/LKR rates that prevailed in the market were one month - 154.62/72; three months - 156.55/75 and six months - 159.50/60.