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Daily report for the 10th February 2025 – Courtesy Wealth Trust Securities Ltd
- Secondary Bond Market Yields Open Broadly Steady
- Rupee Appreciates
The secondary bond market began the new trading week with yields holding broadly steady on the back of subdued activity and transaction volumes. Market participants were seen adopting a wait-and-see approach ahead of the upcoming back-to-back Treasury Bill and Bond auctions scheduled for this week.
The 2025 tenor bonds of 01.06.25, 01.07.25 and 01.08.25 were seen trading within the range of 8.05%-7.95% collectively. The 15.02.28 and 15.03.28 bonds were seen trading at the rate of 10.15%. The 01.07.28, 15.10.28 and 15.12.28 bonds changed hands at the rates of 10.38%, 10.40% and 10.47% respectively. The 15.05.30 bond traded within the range of 11.09%-11.06%.
Meanwhile, in the secondary bill market June and July 2025 bills traded within the range of 8.00%-7.98%.
This comes ahead of the Treasury bill auction due today, which will have a total amount of Rs. 157.50 billion on offer, a decrease of Rs. 22.50 billion over the previous week. This will consist of Rs. 27.50 billion on the 91-day maturity, Rs 55.00 billion on the 182-day and Rs. 75.00 billion on the 364-day maturity.
For reference, at the weekly Treasury Bill auction held last Wednesday (07/02/2025), weighted average rates declined across all three offered maturities for the 9th consecutive week. As such rates were seen continuing on a broader overall downward trajectory, with a reduction in yields observed on at least one tenor over the last 13 weeks. Accordingly, the weighted average rates on the 91-day tenor dropped by 14 basis points to 7.79%, the 182-day tenor by 09 basis points to 8.00% and the 364-day tenor by 04 basis point to 8.43%. Total bids received exceeded the offered amount by 2.22 times, and the entire Rs 180.00 billion on offer was successfully raised at the 1st phase in competitive bidding. The demand extended to the 2nd phase which was also oversubscribed and raised the maximum offered amount of Rs 18.00 billion.
The total secondary market Treasury bond/bill transacted volume for 07th February was Rs. 21.89 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 8.00% and 8.00% respectively.
The net liquidity surplus stood at Rs. 153.52 billion yesterday. Rs. 2.81 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 156.33 billion was deposited at the Central Banks SDFR (Standard Deposit Facility Rate) of 7.50%.
Forex Market
In the Forex market, the USD/LKR rate on spot contracts closed the day appreciating to Rs. 296.70/297.00 against its previous day’s closing level of Rs. 297.00/297.50.
The total USD/LKR traded volume for 07th February was US $ 73.45 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)