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Daily report for the 17th March 2025 – Courtesy Wealth Trust Securities Ltd
- Secondary Bond Market Rallies; Yields Nose-Dive
- Rupee Depreciates
The secondary bond market yesterday kicked off the week on a bullish note with aggressive buying interest pushing yields down further, carrying over from last week’s rally. Market activity and transaction volumes were seen at robust levels, as strong demand was observed particularly on tenors from 2028 onwards. This was supported by increased overnight market liquidity as well as a reduction in call money rates and repo rates. In addition, it was reported that Bloomberg Economics projected Sri Lanka’s GDP grew by 5.20% during the year 2024 amidst a low inflation environment.
Accordingly, the yield on the 01.07.28 and 01.09.28 maturities declined from intraday highs to lows of 10.10%-9.99% and 10.08%-10.00% respectively. The 15.10.28 and 15.12.28 maturities were seen trading down the ranges of 10.10-10.00% and 10.25%-10.08% respectively. The 15.09.29 maturity was seen trading down the range of 10.48%-10.42%, while the yield on the 15.12.29 maturity was seen declining down the range of 10.55%-10.45%. For reference the 15.12.29 maturity was issued at auction just last week (on 12th March 2025) at the weighted average rate of 10.72%. The rate of the 15.10.30 maturity was seen trading down from an intraday high to a low 10.70%-10.65%. Similarly, the 15.12.32 and 01.09.34 traded down the ranges of 11.35%-11.10% and 11.42%-11.36% respectively.
As a result, the yield curve was observed notching down further as two-way quotes closed the day down relatively steeply.
The total secondary market Treasury bond/bill transacted volume for 14th March was Rs. 21.64 billion.
In the money market, the net liquidity surplus stood at Rs. 181.72 billion yesterday. Rs. 0.12 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 181.84 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 7.50%.
The weighted average rates on call money and repo were registered at 7.96% and 7.98% respectively.
Forex Market
In the Forex market, the USD/LKR rate on spot contracts closed the day depreciating to Rs. 296.30/296.45 as against Rs. 295.50/296.00 the previous day.
The total USD/LKR traded volume for 14th March was US $ 64.85 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
