Bond market two-way quotes creep up on moderate activity

By Wealth Trust Securities

The secondary bond market yesterday experienced moderate activity with yields initially dipping but subsequently reversed gains with rates moving up. 

Trading continued to be centred on the short end of the yield curve. The liquid 2026 tenor 15.12.26 maturity was seen hitting intraday lows of 11.32% before moving up to an intraday high of 11.35%, while the 15.05.26 maturity was seen trading at 11.20%. Similarly, the 2028 tenors of (15.03.28, 01.07.28 and 15.12.28) were seen increasing to intraday highs of 12.20% from intraday lows of 12.11%. Additionally, trades were observed on the short tenor maturities of 15.01.25 and 01.07.25 at the rates of 10.30% and 10.50% respectively. Meanwhile the 01.05.27 and 15.09.27 were seen trading at levels of 11.76% to 11.78 and 12.00%. Subsequently, two-way quotes were seen increasing at the close of business. Transaction volumes were also moderate.

In secondary market bill transactions, July 2024 maturities were seen trading within the range of 10.06% to 9.98% on substantial volumes.

The total secondary market Treasury bond/bill transacted volume for 17 April was Rs. 58.07 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 8.64% and 8.76% respectively. The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight repo auction for Rs. 12.10 billion at a weighted average rate of 8.64%.

The net liquidity surplus stood at Rs. 155.26 billion yesterday as an amount of Rs. 167.35 billion deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 8.50%. 

Forex market 

In the forex market, the USD/LKR rate on spot contracts closed the day broadly steady at Rs. 301.50/302.00 against its previous day’s closing level of Rs. 301.00/302.50.

The total USD/LKR traded volume for 17 April was $ 28.60 million. 

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