Secondary market bond yields dip further on news of sovereign dollar bond issue

Thursday, 9 February 2017 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Activity in the secondary bond market increased considerably yesterday, subsequent to a statement indicating a sovereign dollar bond issue of $ 1.5 billion in addition to a syndicated loan of up to $ 1 billion.

This momentum was further supported by the cancellation of the Treasury bond auction scheduled to be held today. Yet again, activity centered on the liquid 2021 maturities (i.e. 01.05.21 and 01.08.21) as their yields dipped to intraday lows of 12.49% and 12.51% respectively.

Furthermore, trading was also witnessed consisting of the 15.07.18 and 15.11.18 maturities at levels of 11.30% to 11.35% and 11.50% respectively while the 01.07.19 maturity was seen changing hands within the range of 11.90% to 12.00%.

Meanwhile in money markets, the overnight call money and repo rates averaged 8.43% and 8.41% respectively with the net surplus liquidity increasing to Rs. 25.76 billion. The Open Market Operations (OMO) Department of the Central Bank of Sri Lanka drained out an amount of Rs. 27.00 billion on an overnight basis at a weighted average of 7.49%.

Rupee appreciates marginally

In Forex markets, the USD/LKR rate on active two week and one month forward contracts closed the day marginally higher at Rs. 151.15/20 and Rs. 151.55/60 respectively against its previous day’s closing of Rs. 151.25/30 and Rs. 151.65/70.

The total USD/LKR traded volume for 7 February 2017 was $ 83.01 million.

Some of forward USD/LKR rates that prevailed in the market were 3 Months - 153.40/55 and

6 Months - 156.05/15.