Short tenure bond yields dip, medium tenure yields increase

Friday, 22 July 2016 00:00 - - {{hitsCtrl.values.hits}}

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By Wealth Trust Securities

The secondary bond market witnessed mixed fortunes yesterday as buying interest on the short end of the curve by foreign and local participants led to its yields decreasing while selling interest on the belly end of the curve saw yields increase.

Yields on the 15.11.18, 15.09.19, 01.05.20 and 01.03.21 were seen dipping to intraday lows of 10.95%, 11.43%, 11.60% and Untitled-1 11.74% respectively against its day opening highs of 11.05%, 11.48%, 11.65% and 11.78%.

However, selling interest on the 01.01.24, 15.03.25 and 01.06.26 maturities saw its yields increase to highs of 12.15%, 12.25% and 12.28% respectively against its day’s opening lows of 12.12%, 12.20% and 12.25%. In addition, the 01.10.22 and 01.09.23 maturities were seen changing hands within the range of 11.94% to 11.96% and 12.08% to 12.10% as well.

Meanwhile, in money markets, the net liquidity shortfall was seen decreasing to a two-week low of Rs. 40.91 billion yesterday as the overnight call money and repo rates averaged at 8.23% and 8.09% respectively. The Open Market Operations (OMO) Department of the Central Bank was seen injecting an amount of Rs. 40 billion at a weighted average of 7.98%.

Rupee appreciates

In Forex markets, the rupee on the active one-week forward contract appreciated for the first time during the week to close the day at Rs. 146.20/40 against its previous day’s closing levels of Rs. 146.95/15 on the back of foreign buying in Rupee bonds. The total volume traded during the day of 20 July 2016 was $ 72.75 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 146.80/10; 3 months - 148.40/70 and 6 months - 150.60/90.

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