Secondary market bond yields continue edging up

Friday, 14 October 2016 00:01 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The upward trend in secondary market bond yields continued yesterday as well on the back of continued foreign selling on the short end of the yield curve and local selling interest on the belly end to the long end of the curve.

The short dated maturity of 15.11.2018 continued to change hands within the range of 11.00% to 11.10% on the back of considerable volumes while yields on the 01.08.2026 maturity was seen increasing to a daily high of 11.90% from an opening low of 11.85%.

In the secondary bill market, April and August 2017 maturities changed hands with the range of 9.50% to 9.55% and 10.15% to 10.20% respectively.

Meanwhile in money markets, the overnight Repo weighted average was seen exceeding 9.00% for the second time during the month of October to record 9.15% while the overnight call money weighted average remained stagnant at 8.42%. The Open Market Operations (OMO) Department of Central Bank was seen injecting an amount of Rs.55.00 billion on an overnight basis at a weighted average of 8.49% by way of an overnight reverse repo auction. The net liquidity shortfall was seen increasing once again to 53.52 billion.

Rupee appreciates further

The tight liquidity situation in the system led to the USD/LKR rate appreciating yesterday mainly on the spot next contract to Rs.146.90/02 while cash and tom contacts were traded within the range of Rs.146.82 to Rs.146.88. The one week forward contract closed at Rs.147.08/14. The total USD/LKR traded volume for 12 October was $ 128.10 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 147.70/85; three months – 149.25/35; six months – 151.75/85.