Secondary Bond Market Yields Edge Up on Thin Trade

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Daily report for the 21st October 2024 – Courtesy Wealth Trust Securities Ltd

  • Secondary Bond Market Yields Edge Up on Thin Trade
  • NCPI Records Deflation
  • Rupee Stable

The secondary bond market started off the trading week on a dull note, with yields edging up. The market was at a complete standstill for much of the day, with only sparse trades observed on thin overall transaction volumes.

Accordingly limited trades were observed on selected tenors. The short tenor 01.12.24 maturity changed hands at the rate of 9.50%. The 2027 tenor 15.09.27 and 15.12.27 maturities at the rate of 11.35% and 11.40%-11.45% respectively. The 15.03.28 maturity saw yields edge up from 11.73% to 11.75%, while the 01.07.28 traded up the range of 11.80%-11.82%. The 15.06.29 maturity reported at the rate of 11.85%. Additionally, trades were observed on the 01.10.32 maturity within the range of 12.35%-12.39%.

Meanwhile, the secondary bill market yesterday saw January maturities (close to 03 months) changing hands within the range of 9.30%-9.25%.

On the inflation front, the National Consumer Price Index – NCPI (Base: 2021=100) or National inflation for the month of October 2024 was recorded at -0.20% on its point to point as against 1.10% recorded in September 2024, while the annual average inflation was recorded at 2.70%. This marks the first instance of deflation in the NCPI since January 2016.

The total secondary market Treasury bond/bill transacted volume for 18th October was Rs. 10.39 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 8.57% and 8.65% respectively. The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight repo auction for Rs. 47.70 billion at the weighted average rate of 8.53%.

The net liquidity surplus stood at Rs. 114.50 billion yesterday. An amount of Rs 0.30 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 9.25%, while an amount of Rs. 162.50 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day steady at Rs. 293.15/293.20 against its previous day’s closing level of Rs. 293.00/293.20.

The total USD/LKR traded volume for 18th October was US $ 42.88 million.

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