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Weekly report for the week ending 17h April 2025 – Courtesy Wealth Trust Securities Ltd
- Secondary Bond Market Range-Bound
- T-Bill Auction Undersubscribed for a 4th Straight Week; Rates Remain Broadly Steady
- Foreign Holdings in Rupee Treasuries Records Net Outflow for 2nd Consecutive Week
- Rupee Depreciates
The secondary bond market for the holiday-shortened week ending April 17th, due to the Sinhala and Tamil New Year, saw yields trade largely range-bound. The sideways momentum resulted in the market entering a consolidation phase, as participants adopted a cautious stance amid the absence of strong directional cues. Market activity and transaction volumes remained at decent levels despite the holiday lull. The majority of the action was centered on the 2028–2029 tenors.
The 15.02.28 and 15.03.28 maturities saw yields trade within the range of 10.05%-9.98%%. The 01.07.28 maturity was seen trading at the rate of 10.15% and the 15.10.28 maturity within the range of 10.27%-10.24%. The 15.09.29 and 15.12.29 maturity traded at the rates of 10.50% and 10.59%-10.56%. The 15.03.31 and 15.12.31 maturities were seen trading at the rate of 11.15%.
The weekly Treasury bill auction conducted last Wednesday went undersubscribed at its 1st phase for a fourth consecutive week, with only 71.32% or Rs 62.40 billion of the total Rs 87.50 billion on offer accepted. This was despite total bids received exceeding the offered amount by 2.44 times.
The auction saw weighted average yield rates remained broadly steady. Accordingly, the weighted average rate on the 91-day tenor was recorded unchanged at 7.59% and the 364-day tenor at 8.31%. However, the weighted average rate on the 182-day tenor increased by 05 basis points to 7.96%
91% or majority of the funds raised at the auction were from the 182-day maturity. The other two tenors only contributed less than 10% of the funds raised.
Meanwhile, the foreign holding in Rupee Treasuries recorded a net outflow for the 2nd consecutive week for the week ending 16th April 2025 amounting to Rs 1.46 billion, and as a result the total holding dropped to Rs. 87.83 billion.
The total outstanding liquidity surplus in the inter-bank money market dropped to Rs. 57.33 billion as at the week ending April 17th, 2025, from Rs. 61.71 billion recorded the previous week. The weighted average interest rates on call money and repo were recorded within the ranges of 7.96% and 7.95%-7.96% respectively.
The Central Bank of Sri Lankas (CBSL) holding of Government Securities was registered at Rs. 2,511.92 billion as at the April 17th, 2025, unchanged from the previous week’s closing level.
In the Forex market, the USD/LKR rate on spot contracts was seen depreciating, to close the week at Rs. 299.00/299.10 as against the previous week’s closing level of Rs. 298.10/298.30 and subsequent to trading at a high of Rs. 298.35 and a low of Rs. 299.30.
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(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)