Bond market remains bearish ahead of a total gigantic bond auction

By Wealth Trust Securities

The bearish sentiment in the secondary bond market persisted yesterday as most market participants were seen adopting a wait and see policy ahead of the Treasury bond auctions due today.

Today’s bond auctions, conducted in lieu of a Treasury bond maturity of Rs. 124.6 billion due on 1 July, will see an total amount of Rs. 150 billion on offer consisting of Rs. 60.00 billion on a 01.06.2025 maturity, Rs. 30 billion on a 15.01.2028 maturity and a further Rs. 60 billion on a new 15.05.2031 maturity.

At the auctions conducted on 15 July, an amount of Rs. 60 billion was taken up in total against a total offered amount of Rs. 50 billion which included the 20% offered through the direct issuance window on both maturities. The weighted average rates were recorded at 20.30% and 20.19% on the 01.06.2025 and 15.01.2028 maturities respectively.

The total secondary market Treasury bond/bill transacted volume for 23 June 2022 was Rs. 7.41 billion.   

In money markets, the weighted average rates on overnight Call money and REPO stood at 14.50% each while the net liquidity deficit stood at Rs. 473.34 billion yesterday. An amount of Rs. 218.35 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 13.50% while an amount of Rs. 691.69 billion was withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 14.50%.

Forex market

In the Forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 360.30 yesterday.

The total USD/LKR traded volume for 24 June 2022 was $ 10.90 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)