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Daily report for the 10th September 2024 – Courtesy Wealth Trust Securities Ltd
- Yields Edge Up Further in the Secondary Bond Market
- Rs 180 Bn on Offer at Weekly Treasury Bill Auction
- Rupee appreciates
The Secondary Bond Market yesterday, saw yields increase further, as the negative to bearish sentiment was carried over from the day prior. Market activity was muted, as market participants were seen adopting a watchful stance ahead of presidential election and the upcoming Rs 290 Bn T Bond auction due to be held on the 12th of September (this Thursday).
Limited trades were observed on selected tenors. The 01.02.26 was seen trading at 10.65%. The 01.05.27 maturity was seen trading at the rate of 12.60%. The 2028 maturities of 01.07.28 and 15.12.28 were seen changing hands at the elevated levels of 13.20% to 13.23% collectively. The 15.07.29 and 15.09.29 maturity saw yields increase to 13.35% and from 13.45% to 13.50% respectively.
The Treasury bill auction due today will have a total amount of Rs. 180 billion on offer, an increase of Rs. 28 billion over its previous week. This will consist of Rs. 60 billion on the 91-day, Rs 90 billion 182-day and Rs. 30 billion on the 364-day maturity.
For context, at the weekly Treasury bill auction conducted last Wednesday, weighted average yields on shorter-tenor securities rose for the fifth consecutive week. The 91-day yield increased by 12 basis points to 9.61%, while the 182-day yield climbed 10 basis points to 9.94%. The 364-day yield edged up by 2 basis points to 10.03%, marking its first increase in four weeks. The entire Rs 152.00 billion on offer was raised in the first phase, with bids exceeding the offer by 1.62 times.
The total secondary market Treasury bond/bill transacted volume for 09th September was Rs. 18.64 billion.
In money markets, the weighted average rate on overnight call money was at 8.59% and repo was at 8.70%.
The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight and 3-day term reverse repo auctions for Rs. 24.36 billion and Rs. 39.00 billion at the weighted average rates of 8.52% and 8.81% respectively.
The net liquidity surplus stood at Rs. 41.98 billion yesterday as an amount of Rs. 106.17 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25%, while an amount of Rs. 0.84 withdrawn from the Central Banks SLFR (Standard Lending Facility Rate) of 9.25%.
Forex Market
In the Forex market, the USD/LKR rate on spot contracts appreciated to close trading yesterday at Rs. 300.60/300.75 against its previous day’s closing level of Rs. 301.50/302.00.
The total USD/LKR traded volume for 09th September was US $ 55.07 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)