Secondary market bond yields continue declining trend

Friday, 4 July 2014 00:50 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Continued buying interest mainly on the longer leg of the yield curve kept secondary bond markets bullish with activity remaining high yesterday. The market favourite maturities of 1 July 2019, 1 May 2021 and 1 July 2022 were seen changing hands within a tight range of 8.24% to 8.27%, 8.88% to 8.90% and 9.24% to 9.28% respectively. In addition, buying interest on the nine and a half year maturity of 1 January 2024 saw it change hands within the range of 9.67% to 9.70% while on the shorter end on the yield curve the maturities of 15 May 2017 and the two 2018’s (i.e. 1 April 2018 and 15 August 2018) was traded within the range of 7.31% to 7.35%, 7.90% to 7.94% and 7.97% to 8.00% respectively as well. Meanwhile in secondary bill markets, the 364-day bill continued to be quoted at levels of 6.89% to 6.93%. The Open Market Operations (OMO) department of the Central Bank was seen conducting two term repo auctions yesterday for durations of 35-days and 77-days, where a total amount of Rs. 10.50 billion was drained out from the system at weighted averages of 6.75% and 6.80% respectively, valued for 7 July in lieu of a term repo maturity falling due. Overnight call money and repo rates increased marginally to average 6.99% and 6.59% respectively as net surplus liquidity dipped to a 34-day low of Rs. 1.388 billion yesterday. Rupee appreciates for a third consecutive day Meanwhile in Forex markets, the USD/LKR rate appreciated marginally for a third consecutive day to close the day at Rs. 130.27/29 as liquidity dried up in the system. The total USD/LKR traded volumes for 2 July stood at $ 139.40 million. Some of the forward dollar rates that prevailed in the market were 1 Month: Rs. 130.68, 3 Months: Rs. 131.36 and 6 Months: Rs. 132.46.