Secondary Bond market activity increases

Friday, 13 June 2025 00:14 - - {{hitsCtrl.values.hits}}

Rs. 111 b T-Bond auction fully subscribed; market favourite 2029 tenor records bullish outcome
Rupee depreciates marginally

By Wealthtrust Securities

The Treasury Bond auction held yesterday (12) was fully subscribed, with the full Rs. 111 billion on offer successfully raised at the first phase in competitive bidding and total bids exceeding the offer by 2.40 times.

The 15.10.29 maturity (10.35% coupon) recorded a bullish outcome and was fully subscribed in the first phase at a weighted average yield of 9.41%, coming in below initial market expectations. For comparison, this was lower than the opening Secondary market two-way quotes of 9.40% / 9.45% on the 15.09.29 maturity and 9.48% / 9.52% on the 15.12.29 maturity at the start of the day. However, said maturities subsequently traded down to touch lows of 9.40% and 9.42% respectively as the auction was ongoing.

The 15.12.32 maturity (11.50% coupon) also raised the entire maturity-wise offered amount of Rs. 70.00 billion at a yield of 9.47%. However, this was slightly above market expectations as the maturity was seen quoted at the rate of 10.15%/10.25% just prior to the auction.

The Secondary Bond market yesterday initially saw concentrated buying interest, particularly on the popular 2029 tenors, driving yields lower in that segment. The rest of the yield curve remained broadly steady during the early session. However, profit-taking pressure in the latter part of the day — following auction results — led to a partial reversal of earlier gains. Market activity and transaction volumes were seen at healthy levels.

The 15.12.26 maturity was seen trading at the rate of 7.98%. The 15.03.28 and 01.05.28 maturities were seen trading at the rates of 8.70% and 8.72%-8.75% respectively. The 15.06.29 maturity was seen trading at the rate of 9.35%. The 15.12.29 maturity touched an intraday low of 9.42% from an intraday high of 9.48% at the start of the day, however post auction profit taking pressure pushed rates back up to trade back at 9.48% again. The 15.03.31 maturity was seen trading at the rate of 9.90%.

The total Secondary market Treasury Bond/Bill transacted volume for 11 June was Rs. 95.74 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.70% and 7.72% respectively.

The net liquidity surplus stood at Rs. 178.56 billion yesterday. An amount of Rs. 0.28 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.25%, while an amount of

Rs. 178.84 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 7.25%.

Forex market

In the Forex market, the USD/LKR rate on spot contracts closed the day depreciating marginally to Rs. 299.00/299.15 as against Rs. 298.98/299.05 the previous day.

The total USD/LKR traded volume for 11 June was $ 67.90 million.

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

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