Rs. 155 b Treasury Bond auction fully subscribed

• Secondary Bond market remains positive
• Rupee stable

By Wealth Trust Securities 

The round of Treasury Bond auctions conducted yesterday recorded a positive outcome. Yields were seen reflecting the bullish momentum in the secondary bond market and successfully raised the entire Rs. 155 on offer across both phases. The total bids received exceeded the offered amount by a healthy 2.91 times, across both phases.

In particular, the 15.06.29 maturity (11.75% coupon) was issued at a weighted average yield of 10.30%. This was in line with market expectations as the maturity was seen quoted at the rate of 10.30%/10.35% just prior to the auction. Maturity-wise the entire Rs. 60 billion offered was snapped up at the 1st phase of subscription in competitive bidding.

The 15.03.31 maturity (10.25% coupon) was issued at the weighted average rate of 10.96% and also raised the entire Rs. 55 billion on offer at the 1st phase. This was also in line with market expectations as the maturity was seen quoted at the two-way rate of 10.90%/11.00% just prior to the auction.

The 15.03.35 maturity was issued at the weighted average rate of 11.22%. However, the maturity only raised Rs. 15.76 billion or 39.40% of the offered amount at the 1st phase. This prompted the opening of the 2nd phase which resulted in the entire Rs. 40 billion offered being raised and led to the overall auction going fully subscribed.

An issuance window for 15.06.29 and 15.03.31 maturities will be open until close of business of the day prior to settlement date (i.e., 3 p.m. on 29.04.2025) at their respective Weighted Average Yield Rates (WAYR), up to 10% of the amount offered. 

Meanwhile, the Secondary Bond market yesterday carried over the positive momentum from the previous week and saw yields edge down marginally further. Rates were seeing adjusting downwards to reflect the auction outcome, post-auction. Trading activity and transaction volumes were seen at healthy levels.

The 15.09.27 maturity was seen trading down from 9.60% to a low of 9.50%. The 15.09.29 and 15.12.29 maturities were seen trading within the ranges of 10.40%-10.38% and 10.48%-10.44% respectively.

This comes ahead of the Treasury Bill auction due today, which will have a total amount of Rs. 145 billion on offer, an increase of Rs. 30 billion over the previous week. This will consist of Rs. 40 billion on the 91-day maturity, Rs. 50 billion on the 182-day and Rs. 55 billion on the 364-day maturity.

For reference, the weekly Treasury Bill auction held last Wednesday (23.04.25) went undersubscribed at its 1st phase for a fifth consecutive week, raising 83.15% or Rs 95.62 billion of the total Rs. 115 billion on offer accepted. This was despite total bids received exceeding the offered amount by 2.01 times. The auction saw weighted average yield rates exhibit mixed results. Accordingly, the weighted average rates on the 91-day tenor increased by 3 basis points to 7.62% and the 182-day tenor rose by 2 basis points to 7.98%. However, the weighted average rate on the 364-day tenor declined by 2 basis points to 8.29%.

The total secondary market Treasury Bond/Bill transacted volume for 25 April was Rs. 21.83 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.98% and 7.99% respectively.

The net liquidity surplus stood at Rs. 144.02 billion yesterday. Rs. 0.16 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 144.18 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 7.50%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closing the day broadly unchanged marginally to Rs. 299.60/299.70 as against 299.65/299.75 the previous day.

The total USD/LKR traded volume for 25 April was 

$ 75.08 million.

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