Bond yields increase ahead of T-bill auction

• All time high volume on offer at auction

By Wealth Trust Securities 

The secondary market bond yields increased yesterday on the back of renewed selling interest while activity moderated towards the later part of the day. 

The yields on the liquid maturities of 01.06.25, 01.05.27 and 15.01.28 increased to an intraday high of 20.50% each against its previous day’s closing level of 20.10/50, 20.00/30 and 20.00/40. The secondary bill market too witnessed the same trend as the previous weeks one year maturity hit a high of 23.40% against its previous day’s closing level of 23.00/50.

The weekly Treasury bill auction due today will see an all-time high volume of Rs. 98 billion on offer, consisting of Rs. 40 billion on the 91 day maturity, Rs. 30 billion on the 182 day maturity and Rs. 28 billion on the 364 day maturity, reflecting an increase of Rs. 15 billion in comparison to its previous weeks offered volume. 

At last week’s auction, weighted average rates decreased across the board for a second consecutive week by 90, 62 and 55 basis points on the 3 month, 6 month and 1 year maturities respectively to 22.75%, 23.60% and 23.75%.

The total secondary market Treasury bond/bill transacted volume for 6 June was Rs. 17.67 billion.   

In money markets, the weighted average rates on overnight Call money and REPO remained steady at Central Bank’s Standard Deposit Facility Rate (SDFR) of 14.50% each as an amount of Rs. 743.78 billion was withdrawn from Central Banks SLFR of 14.50%. The net liquidity deficit was registered at Rs. 536.39 billion yesterday as an amount of Rs. 207.39 billion was deposited at Central Bank’s Standard Lending Facility Rate (SLFR) of 13.50%.  

Forex market 

In the forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 360.2773 yesterday.

The total USD/LKR traded volume for 6 June was $ 3.00 million.  

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